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What Has Been Capitalized into Property Values: Human Capital, Social Capital, or Cultural Capital?


  • Shihe Fu


Urban amenities can be capitalized into land values or property values. However, little attention has been paid to the capitalization of social amenities. This paper classifies three types of social-interaction-based social amenities: human capital, social capital, and cultural capital at residential neighborhood levels. We use the restricted version of the 1990 Massachusetts Census data and estimate hedonic housing models with social amenities. The findings are as follows: (1) Human capital has significant positive effects on property values. This tests the Lucas conjecture. (2) Different types of social capital have different effects on property values: an increase in the percentage of new residents has significant positive effects on property values, probably due to the strength of weak ties. However, an increase in the percentage of single-parent households has negative effects on property values. An increase in the home ownership rate has positive effects at large geographic levels. (3) Cultural capital effects vary from high to low geographic levels, the effects of English proficiency and racial homogeneity are positive at and beyond the tract level, but insignificant at the block level. This may imply that cultural capital is more important in social interactions at large geographic scale.

Suggested Citation

  • Shihe Fu, 2005. "What Has Been Capitalized into Property Values: Human Capital, Social Capital, or Cultural Capital?," Working Papers 05-25, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:05-25

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    References listed on IDEAS

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    Cited by:

    1. Li, Qiang, 2014. "Ethnic diversity and neighborhood house prices," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 21-38.
    2. Zenou, Yves, 2007. "Social Interactions and Labour Market Outcomes in Cities," CEPR Discussion Papers 6129, C.E.P.R. Discussion Papers.
    3. Zenou, Yves, 2013. "Spatial versus social mismatch," Journal of Urban Economics, Elsevier, vol. 74(C), pages 113-132.

    More about this item


    Urban amenities; capitalization; property values; human capital; social capital; cultural capital; hedonic model; social interaction;

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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