Individuals invest in their local environments by volunteering, getting involved in local" government, becoming informed about their political leaders, joining non-professional" organizations and even gardening. Homeownership may encourage these investments because homeownership gives individuals an incentive to improve their community and because" homeownership creates barriers to mobility. Using the U.S. General Social Survey document that homeowners are more likely to invest in social capital, and a simple instrumental" variables strategy suggests that the relationship may be causal. While our results are not" conclusive, we find evidence that a large portion of the effect of homeownership on these" investments may come from lower mobility rates for homeowners. Using the German Socio-Economic Panel homeownership and citizenship controlling" for individual fixed effects. Finally, across cities and counties, areas with more homeowners" have lower government spending, but spend a larger share of their government budget on" education and highways.
*Published:
(with Rikard Forslid) Journal of International Economics, Vol.50, no.2(2000): 497-517.
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