The Effect of Neighborhood Diversity on Volunteering: Evidence From New Zealand

Abstract

Abstract A growing empirical literature has found that neighborhood heterogeneity lowers people’s likelihood of contributing to public goods. However, this literature has been mostly cross-sectional, and so struggled to address the effects of unobserved influences on contributions that may be correlated with heterogeneity. It has also paid little attention to how heterogeneity’s estimated effects are influenced by neighborhood size or the concavity of heterogeneity measures. With access to a panel of three waves of census data on volunteering rates in New Zealand, released at two fine levels of aggregation, we can control for stable unobserved neighborhood characteristics that may affect volunteering rates. We use pooled cross-section, between and fixed effects regressions to test whether volunteering rates are lowered by heterogeneity in race/ethnicity, language, birthplace, or income. We find that estimates are affected by neighborhood definition, and that ethnic and language heterogeneity are robustly associated with lower volunteering rates in New Zealand.