Research Accomplishment Reports 2007

Impacts of Social Capital on the Economic Development and Well-Being of Rural Areas

D. L. Debertin
Department of Agricultural Economics

 

Project Description

A PhD dissertation under the direction of the principal investigator is underway to analyze the linkages between varied measures of social capital and demographic data for Kentucky. Studies similar to this have been conducted using county-level data, but this analysis is unique and the first of its kind in that it utilizes data available for Kentucky at the zip code level. Zip code level data presents both opportunities and problems for the applied social science researcher. First, zip code level data generally comprises a much smaller and potentially more homogenous demographic than do county-level data. Demographics can and frequently do vary widely within a county, and while there can still be significant variation within a zip code, this variation will likely be much smaller than for an entire county. Second, since the geographic area is much smaller, in a cross-sectional study for a state such as Kentucky, depending on the selection of zip codes to be included for study (rural zip codes, urban zip codes or both) there will be over 700 observations as opposed to the maximum 120 cross-sectional observations that would be employed using all Kentucky counties, both urban and rural. From a statistical perspective the combination of many more observations with greater homogeneity should lead to better, more meaningful hypothesis testing. Particularly in largely rural areas, zip codes can be quite tiny in population even if they cover a fairly large geographic area because every post office, no matter how small the town, is assigned a unique zip code. Further complicating matters is the fact that zip codes routinely cross county boundaries as mail service is frequently provided from a post office located in a particular county to rural residents who are physically located in a nearby adjacent county, and one of the methodological difficulties in employing zip code data involves managing these statistical problems and issues.

How basic demographics ultimately affects social capital development is both interesting and complex. It is sometimes believed that the amount of social capital in a particular geographic region (such as a zip code in our study) would vary with simple measures of family income but this is not necessary true. High-income gated communities, for example, may measure rather low based on traditional social capital indicators. Conversely, some low income areas may possess high social capital. Further complexities are introduced with the introduction of non-geographic or semi-geographic social capital. To illustrate a practical issue for our study, a specific service club such as a local Kiwanis or Rotary might not necessarily draw its entire membership from a single zip code, even though the club may regularly meet within that zip code. In addition, a master's-level thesis completed by Kaustav Misra during 2007 examined the linkages between demographics and youth poverty. Details of that work were reported in the 2006 AD-421 report.

Impact

Since the PhD study is currently underway there are not yet statistical results to report. However the anticipated results first should give us a clearer understanding of how social capital varies across much smaller geographic regions (zip codes) than we have known from statistical studies that in the past employed county level data. Second, we will be able to determine whether or not by employing the zip code level data whether the results linking social capital measures to demographics are improved relative to the results that have been obtained in the past employing county level data.

Publications

Misra, K. 2007. Determinants of Youth Poverty: A Zip Code Analysis. MS Thesis. University of Kentucky

Hudoyo. A. The Production of Social Capital and Its Impact on Economic Development: Using a ZIP Code Area as a Unit of Observation in Rural Area Kentucky (in process, to be completed 2008)