Spatial Heterogeneity and Subjective Wellbeing: Exploring the Role of Social Capital in Metropolitan Areas Using Multilevel Modelling

The role of social capital, the social networks that influence human wellbeing has been explored by empirical research in the US and Europe, however no study so far has undertaken a systematic investigation of the impact of the various dimensions of social capital in metropolitan areas. Addressing this gap in knowledge can have practical and policy-oriented implications by contributing to more informed decision-making processes in metro areas, better targeted interventions and ultimately an improved quality of life for residents. This study adopts a multi-level modelling approach to investigate life satisfaction and social capital heterogeneity within metropolitan areas in Australia. Our dataset was collected by the Household Income and Labour Dynamics in Australia survey and includes almost 4,000 individual respondents. Our results show that social trust, social engagement and connection, and a psychological sense of community measured at an individual level have a strong positive influence on individual life satisfaction. Conversely negative individual perceptions about neighbourhood criminality and shabbiness are associated with a lower level of life satisfaction. The application of a model using random slope coefficients for social capital variables suggests that most of the spatial heterogeneity between census districts is explained by between-individual (compositional) variations, rather than contextual differences. Only social connection and engagement appeared to have a distinctive contextual influence. These findings confirm the importance of social inclusion in enhancing wellbeing for everyone and may inform social policy on how to promote social networks in urban areas by all levels of government.