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CEP discussion paper
Diversity and neighbourhood satisfaction
Monica Langella and Alan Manning
December 2016
Paper No' CEPDP1459:
Full Paper (pdf)

JEL Classification: Z1

Tags: neighbourhood satisfaction; social capital; diversity; deprivation

This paper investigates the impact of ethnic diversity on individuals’ overall satisfaction with and other aspects of their neighbourhood. It uses panel data and a variety of empirical methods to control for potential endogeneity of diversity and of the location choices. We find that a higher white share in the neighbourhood raises overall satisfaction with the neighbourhood in our (overwhelming white) sample, but has no significant impact on generalised trust or other commonly-used measures of social capital. We suggest that part of the impact of diversity on overall neighbourhood satisfaction may be through an effect on a fear of crime and the quality of social life.