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Homeownership and Social Capital in New Zealand

  • Matthew Roskruge

    ()

    (University of Waikato)

  • Arthur Grimes

    ()

    (Motu Economic and Public Policy Research)

  • Philip McCann

    ()

    (University of Groningen)

  • Jacques Poot

    ()

    (University of Waikato)

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.

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File URL: http://motu-www.motu.org.nz/wpapers/11_02.pdf
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Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 11_02.

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Length: 35 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:mtu:wpaper:11_02
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  1. Cobb-Clark, Deborah A. & Hildebrand, Vincent A., 2002. "The Wealth and Asset Holdings of U.S.- Born and Foreign-Born Households: Evidence from SIPP Data," IZA Discussion Papers 674, Institute for the Study of Labor (IZA).
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