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

Author

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:doc2012-24
    as

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    File URL: http://ieb.ub.edu/wp-content/uploads/2018/04/2012-IEB-WorkingPaper-24.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Ethnic diversity; social housing; social capital;
    All these keywords.

    JEL classification:

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

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