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De-composing diversity: In-group size and out-group entropy and their relationship to neighbourhood cohesion

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  • Koopmans, Ruud
  • Schaeffer, Merlin
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    Abstract

    Ethnic diversity is typically measured by the well-known Hirschman-Herfindahl Index. This paper discusses the merits of an alternative approach, which is in our view better suited to tease out why and how ethnic diversity matters. The approach consists of two elements. First, all existing diversity indices are non-relational. From the viewpoint of theoretical accounts that attribute negative diversity effects to ingroup favouritism and out-group threat, it should however matter whether, given a certain level of overall diversity, an individual belongs to a minority group or to the dominant majority. We therefore decompose diversity by distinguishing the in-group share from the diversity of ethnic out-groups. Second, we show how generalized entropy measures can be used to test which of diversity's two basic dimensions matters most: the variety of groups, or the unequal distribution (balance) of the population over groups. These measures allow us to test different theoretical explanations against each other, because they imply different expectations regarding the effects of in-group size, out-group variety, and balance. We apply these ideas in an analysis of various social cohesion measures across 55 German localities and show that in-group size matters more for natives, and out-group diversity more for immigrants. In both groups, the variety component of diversity seems to be decisive. These findings provide little support for group threat as an important mechanism behind negative diversity effects, and are most in line with the predictions of theories that emphasize coordination problems, asymmetric preferences, and network closure, which are maximized where there are many small groups. --

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    Bibliographic Info

    Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Migration, Integration, Transnationalization with number SP VI 2013-104.

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    Date of creation: 2013
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    Handle: RePEc:zbw:wzbmit:spvi2013104

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    Keywords: ethnic diversity; social cohesion; entropy; in-group favouritism; group threat;

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    1. Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    2. Holger Stichnoth & Karine Van der Straeten, 2013. "Ethnic Diversity, Public Spending, And Individual Support For The Welfare State: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 27(2), pages 364-389, 04.
    3. Mwangi S. Kimenyi, 2006. "Ethnicity, Governance and the Provision of Public Goods," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 15(1), pages 62-99, April.
    4. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
    5. Andy Stirling, 2007. "A General Framework for Analysing Diversity in Science, Technology and Society," SPRU Working Paper Series 156, SPRU - Science and Technology Policy Research, University of Sussex.
    6. Habyarimana, James P. & Humphreys, Macartan & Posner, Daniel N. & Weinstein, Jeremy, 2006. "Why Does Ethnic Diversity Undermine Public Goods Provision? An Experimental Approach," IZA Discussion Papers 2272, Institute for the Study of Labor (IZA).
    7. Baqir, Reza & Easterly, William & Alesina, Alberto, 1999. "Public Goods and Ethnic Divisions," Scholarly Articles 4551797, Harvard University Department of Economics.
    8. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
    9. Ofer Harel, 2009. "The estimation of R2 and adjusted R2 in incomplete data sets using multiple imputation," Journal of Applied Statistics, Taylor & Francis Journals, vol. 36(10), pages 1109-1118.
    10. Oguzhan C. Dincer, 2011. "Ethnic Diversity And Trust," Contemporary Economic Policy, Western Economic Association International, vol. 29(2), pages 284-293, 04.
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