How Do Neighbors Influence Investment in Social Capital? Homeownership and Length of Residence

This paper uses individual data from Japan to explore how the circumstances of where a person resides is related to the degree of their investment in social capital. Controlling for unobserved area-specific fixed effects and various individual characteristics, I found (1) not only that homeownership and length of residence are positively related to investment in social capital, but also that rates of homeownership and long-time residency in a locality increase an individual’s investments in social capital. Also, (2) the effects of local neighborhood homeownership and local length of residence are distinctly larger than those of an individual’s homeownership or length of residence.