Discussion Paper Details

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Title: Diversity and Public Goods: a Natural Experiment with Exogeneous Residential Allocation

Author(s): Yann Algan, Camille Hémet and David Laitin

Publication Date: October 2011

Keyword(s): Discrimination, Fractionalization and Public Good

Programme Area(s): Development Economics, International Macroeconomics, Labour Economics and Public Economics

Abstract: This paper demonstrates the effects of ethnic and religious diversity on the quality of public spaces. Its identification strategy relies on the exogeneity of public housing allocations in France, and thereby eliminates the bias from endogenous sorting. The paper uses micro evidence of social interactions within housing blocks from the representative French Housing survey, which allows for a detailed identification of the channels through which diversity operates. Differentiating among three channels of public goods provision, the paper finds that heterogeneity in the housing block leads to low levels of sanctions for anti-social behavior and low levels of collective action to improve housing conditions, but no losses in public safety.

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Bibliographic Reference

Algan, Y, Hémet, C and Laitin, D. 2011. 'Diversity and Public Goods: a Natural Experiment with Exogeneous Residential Allocation'. London, Centre for Economic Policy Research.