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Relational Costs and the Production of Social Capital: Evidence from Carpooling

  • Kerwin Charles
  • Patrick Kline

This paper posits that individuals can more easily form social connections with persons of the same race. If true, the greater the incidence among his neighbors of persons of his race, the more likely an individual is to make neighborhood social capital connections, and the more likely he is to engage in activities which require it. The paper tests this idea using an indicator of individual social capital never previously studied: whether the person uses a carpool to get to work. We identify exogenous variation in adult neighborhood racial makeup arising from the racial makeup of the state in which the person was born in the year that he was born, and relate this exogenous portion of adult neighborhood racial composition to individual carpooling propensity using a TSLS approach. The results from this analysis, and from robustness tests which focus on neighborhoods with virtually identical racial distributions, show evidence of strong cross-racial relational difficulties, but interestingly, only for particular pairs of racial groups.

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File URL: http://www.nber.org/papers/w9041.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9041.

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Date of creation: Jul 2002
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Publication status: published as Charles, Kerwin Kofi and Patrick Kline. "Relational Costs And The Production Of Social Capital: Evidence From Carpooling," Economic Journal, 2006, v116(511,Apr), 581-604.
Handle: RePEc:nbr:nberwo:9041
Note: LS
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  18. Timothy Besley, 1995. "Nonmarket Institutions for Credit and Risk Sharing in Low-Income Countries," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 115-127, Summer.
  19. Gonzalez, Arturo, 1998. "Mexican Enclaves and the Price of Culture," Journal of Urban Economics, Elsevier, vol. 43(2), pages 273-291, March.
  20. Caroline Hoxby & M. Daniele Paserman, 1998. "Overidentification Tests with Grouped Data," NBER Technical Working Papers 0223, National Bureau of Economic Research, Inc.
  21. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  22. Knack, Stephen & Keefer, Philip, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1251-88, November.
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