What Has Been Capitalized into Property Values: Human Capital, Social Capital, or Cultural Capital?

Shihe Fu ()

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Urban amenities can be capitalized into land values or property values. However, little attention has been paid to the capitalization of social amenities. This paper classifies three types of social-interaction-based social amenities: human capital, social capital, and cultural capital at residential neighborhood levels. We use the restricted version of the 1990 Massachusetts Census data and estimate hedonic housing models with social amenities. The findings are as follows: (1) Human capital has significant positive effects on property values. This tests the Lucas conjecture. (2) Different types of social capital have different effects on property values: an increase in the percentage of new residents has significant positive effects on property values, probably due to the strength of weak ties. However, an increase in the percentage of single-parent households has negative effects on property values. An increase in the home ownership rate has positive effects at large geographic levels. (3) Cultural capital effects vary from high to low geographic levels, the effects of English proficiency and racial homogeneity are positive at and beyond the tract level, but insignificant at the block level. This may imply that cultural capital is more important in social interactions at large geographic scale.

Keywords: Urban amenities; capitalization; property values; human capital; social capital; cultural capital; hedonic model; social interaction (search for similar items in EconPapers)
JEL-codes: A14 C21 D62 H41 R31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-10
New Economics Papers: this item is included in nep-cul, nep-geo, nep-pbe, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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https://www2.census.gov/ces/wp/2005/CES-WP-05-25.pdf First version, 2005 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:05-25

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