Soil Heterogeneity, Social Learning, and the Formation of Close-Knit Communities

Itzchak Tzachi Raz

Journal of Political Economy, 2025, vol. 133, issue 8, 2643 - 2691

Abstract: This paper examines how environmental heterogeneity influences the formation of close-knit communities. I provide support for the social learning hypothesis, which posits that diverse environmental conditions limited American farmers’ ability to learn from neighbors, weakening communal ties. I document a negative county-level association between soil heterogeneity and close-knit communities. Using individual-level data on nineteenth-century domestic migrants, I show that this association is not driven by selective in-migration and document farmers’ cultural adaptation using a difference-in-differences framework. Focusing on mechanisms, I show that soil heterogeneity slowed farmers’ agricultural learning and prompted those who depended on social networks to migrate elsewhere.

Date: 2025
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