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Diversity and local public goods: a natural experiment with exogenous residential allocation

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Listed:
  • Yann Algan

    () (Sciences-Po)

  • Camille Hémet

    () (Sciences-Po)

  • David Laitin

    () (Stanford University)

Abstract

This paper demonstrates the effects of ethnic diversity on social relationships and the quality of public spaces at a very finite neighborhood level. We use detailed block level data on diversity and housing quality from a representative survey on housing in France. We show how and to what extent diversity among adjacent neighborhoods can affect household well-being and the quality of local public goods, whereas the previous literature looks at aggregate indicators and outcomes. Our identification strategy relies on the exogeneity of public housing allocations with respect to ethnic characteristics in France, and thereby eliminates bias due to endogenous residential sorting. Diversity is shown to have a negative effect on local public goods, either due to vandalism and to the lack of social policing, or due to collective action failure for maintenance. However, we find that diversity has no robust effect on civil conflict at a local level and, if anything, is more related to social anomie. We test the exogeneity of residential allocation across public housing blocks with respect to ethnic characteristics. We also show that our results are not driven by potential biases from self-reported well-being and that they hold even with objective measures of housing quality.

Suggested Citation

  • Yann Algan & Camille Hémet & David Laitin, 2012. "Diversity and local public goods: a natural experiment with exogenous residential allocation," Working Papers 2012/24, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:2012/6/doc2012-24
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    References listed on IDEAS

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    Cited by:

    1. Monica Langella & Alan Manning, 2016. "Diversity and Neighbourhood Satisfaction," CEP Discussion Papers dp1459, Centre for Economic Performance, LSE.
    2. Xu, Guo, 2013. "Development through Empowerment: Delivering Effective Public Services – a Literature Review," ADB Economics Working Paper Series 382, Asian Development Bank.
    3. Pietro Battiston & Simona Gamba, 2016. "When the two ends meet: an experiment on cooperation across the Italian North-South divide," LEM Papers Series 2016/41, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Matthew Collin, 2013. "Tribe or title? Ethnic enclaves and the demand for formal land tenure in a Tanzanian slum," CSAE Working Paper Series 2013-12, Centre for the Study of African Economies, University of Oxford.
    5. Claire Adida & David Laitin & Marie-Anne Valfort, 2014. "Muslims in France: identifying a discriminatory equilibrium," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 1039-1086, October.
    6. Borisova, Ekaterina I. & Polishchuk, Leonid & Peresetsky, Anatoly, 2014. "Collective management of residential housing in Russia: The importance of being social," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 609-629.
    7. Gomes, Joseph, 2014. "The health costs of ethnic distance: evidence from Sub-Saharan Africa," ISER Working Paper Series 2014-33, Institute for Social and Economic Research.
    8. Valeria Rueda & Guillaume Laval & Etienne Patin, 2016. "Achieving the American Dream: Cultural Distance, Cultural Diversity and Economic Performance," Oxford University Economic and Social History Series _140, Economics Group, Nuffield College, University of Oxford.
    9. Mavridis, Dimitris, 2015. "Ethnic Diversity and Social Capital in Indonesia," World Development, Elsevier, vol. 67(C), pages 376-395.
    10. Valeria Rueda, 2016. "When the times they’re not a changin': Essays on the persistent effects of religion, investments, and ancestry on economic, social, and political behaviors at the subnational level," Sciences Po publications info:hdl:2441/7t43ra4ari8, Sciences Po.
    11. Lisa D. Cook & Trevon D. Logan & John M. Parman, 2017. "Racial Segregation and Southern Lynching," NBER Working Papers 23813, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Ethnic diversity; social housing; social capital;

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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