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Homeownership and Social Capital in New Zealand

Author

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  • Roskruge, Matthew
  • Grimes, Arthur
  • McCann, Philip
  • Poot, Jacques

Abstract

Does homeownership affect individual social capital and thereby influence local outcomes? Following DiPasquale and Glaeser, a body of literature suggests that homeownership is positively related to social capital formation. Homeowners have an incentive to engage in the local community in order to preserve or enhance the value of their housing asset. Moreover, homeownership creates barriers to geographic mobility, which increases the present value of the expected stream of benefits from local community social capital. We test the homeownership hypothesis alongside other individual, household and locational determinants of social capital using unique data created by merging the 2006 and 2008 samples of the New Zealand Quality of Life survey. The measures of social capital used in our analysis include trust in others, participation in social networks, attitude towards local governance and sense of community. Since homeownership is not randomly assigned, we complement our regression models with propensity score matching to control for selection effects. The results confirm that homeownership exerts considerable positive impact in the formation of social capital in New Zealand communities. In raising accountability of local government it does, however, lead to reduced satisfaction by homeowners in the performance of local councils.

Suggested Citation

  • Roskruge, Matthew & Grimes, Arthur & McCann, Philip & Poot, Jacques, 2011. "Homeownership and Social Capital in New Zealand," Motu Working Papers 291439, Motu Economic and Public Policy Research.
    • Handle: RePEc:ags:motuwp:291439
    DOI: 10.22004/ag.econ.291439
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    2. Grimes, Arthur & Stillman, Steven & Young, Chris, 2011. "Homeownership, Social Capital and Parental Voice in Schooling," Motu Working Papers 291430, Motu Economic and Public Policy Research.

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    Keywords

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    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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