The Effects of Homeownership on Social Capital


  • Ryan Aldiansyah Akbar Master Program in Economic Planning and Development Policy, Faculty of Economics and Business, Universitas Indonesia, Jakarta, Indonesia. Address: MPKP FEB UI Building, UI Salemba Campus. Salemba Raya No.4, Jakarta 10430. Phone: +62 21 391 2007; Fax : +62 21 392 5339
  • Djoni Hartono Research Cluster on Energy Modeling and Regional Economic Analysis, Department of Economics, Faculty of Economics and Business, Universitas Indonesia, Depok, Indonesia.
  • Adiwan Fahlan Aritenang Urban and Regional Planning, Institut Teknologi Bandung, Bandung, Indonesia



endogeneity, homeownership, household, social capital


Access to homeownership is becoming increasingly limited due to various factors related to a decline in social capital, including sense of stability, security, and community attachment. This study examined the relationship between homeownership and social capital in Indonesia at the household level while addressing endogeneity and heterogeneity issues. This research used panel data from the IFLS-4 and IFLS-5 surveys, employing a fixed-effect regression model with robust standard error and instrumental variables. The study found that homeownership significantly impacts social capital in Indonesia. Furthermore, the effect of homeownership differs between Java and non-Java households and between urban and rural households. The study also identified other significant influencing factors of social capital, such as household size and monthly income. It is concluded that policies aimed at increasing homeownership may positively impact social capital in Indonesia. This research has provided evidence of the heterogeneity of the effect of homeownership on social capital based on geographical location and household characteristics, suggesting that policymakers should develop policies to meet the specific needs of each group to maximize the positive impact of homeownership on social capital.


Alesina, Alberto & La Ferrara, Eliana. (2000). Participation in Heterogeneous Communities. The Quarterly Journal of Economics, 115(3), 847?904. doi: 10.1162/003355300554935

Alderman H, Haddad L, Headey DD, Smith L. Association between economic growth and early childhood nutrition. Lancet Glob Health 2014; 2.

Anton, C. E., & Lawrence, C. (2014). Home is where the heart is: The effect of place of residence on place attachment and community participation. Journal of Environmental Psychology, 40, 451-461.

Austin, D Mark & Baba, Yoko. (1990). Social Determinants of Neighborhood Attachment. Sociological Spectrum: Mid-South Sociological Association 10(1), 59-78. doi: 10.1080/ 02732173.1990.9981912

Arundel, R., & Ronald, R. (2017). The role of urban form in sustainability of community: The case of Amsterdam. Environment and Planning B: Urban Analytics and City Science, 44(1), 33?53. doi:10.1177/0265813515608640

Becker, Lawrence C. (1977). A Definition of Philosophy. Metaphilosopy, 8(2-3), 249-252. doi: 10.1111/j.1467-9973.1977.tb00279.x

Bloze, Gintautas & Skak, Morten. (2015). Housing Equity, Residential Mobility and Commuting. Discussion Papers on Business and Economics, University of Southern Denmark, 16. doi: 10.2139/ssrn.2703833

Bowen, J. R. (1986). On the political construction of tradition: Gotong Royong in Indonesia. The Journal of Asian Studies, 45(3), 545?561. doi:10.2307/2056530

BPS. (2016). Publikasi Statistik Modal Sosial 2014. Jakarta: Badan Pusat Statistik.

BPS. (2018). Publikasi Statistik Modal Sosial 2017. Jakarta: Badan Pusat Statistik.

BPS. (2020). Publikasi Survei Sosial Ekonomi Nasioan 2019. Jakarta: Badan Pusat Statistik

Brown, B., Perkins, D., & Brown, G. (2003). Place Attachment in a Revitalizing Neighborhood: Individual and Block Levels of Analysis. Journal of Environmental Psychology, 23, 259-271. doi: 10.1016/S0272-4944(02)00117-2

Brueckner, Jan & Largey, Ann G. (2008). Social Interaction and Urban Sprawl. Journal of Urban Economics, 64(1), 18-34. doi: 10.1016/j.jue.2007.08.002

Burton, Dawn. (2017). Credit Inclusion and The Home Credit Market in Post-communist Member States of the European Union. Critical Social Policy, 37(3), 444-463. doi: 10.1177/0261018316672991

Cofee, Hilde. (2006). Community Heterogeneity: A Burden for the Creation of Social Capital?. Social Science. doi: 10.1111/j.1540-6237.2006.00415.x

Coffe, Hilde & Geys, Benny. (2005). Toward an Empirical Characterization of Bridging and Bonding Social Capital. Nonprofit and Voluntary Sector Quarterly, 36(1), 121-139. doi:10.1177/0899764006293181

Coleman, J. S. (1990). Foundations of Social Theory. Cambridge: Belknap Press of Harvard University Press.

De Decker, Pascal et al. (2010). Understanding Housing Sprawl: The Case of Flanders, Belgium. Environment and Planning A: Economy and Space, 43(7), 1634-1654. doi:10.1068/a43242

Elsinga, M. & Hoekstra, J. (2005). Homeownership and Housing Satisfaction. Journal of Housing and the Built Environment, 20, 401-424. doi: 10.1007/s10901-005-9023-4

Flora, C. B. & Thiboumery, A. (2005). Community Capitals: Poverty Reduction and Rural Development in Dry Areas. Annals of Arid Zone, 45(3&4), 239?253.

Fraser, T. (2021). Japanese social capital and social vulnerability indices: Measuring drivers of community resilience 2000?2017. International Journal of Disaster Risk Reduction, 52, 101965.

Glaeser, Edward L et al. (2000). Measuring Trust. The Quarterly Journal of Economics, 115(3), 811?846. doi: 10.1162/003355300554926

Glaeser, E., Henderson, J. V., & Inman, R. P. (2000). The Future of Urban Research: Non-market Interactions. Brookings-Wharton Papers on Urban Affairs, 2000(1), 101?138. doi:10.1353/urb.2000.0004

Gould, E. D. & Hijzen, A. (2016). Growing Apart, Losing Trust? The Impact of Inequality on Social Capital. IMF Working Papers, 176 . doi:10.5089/9781475529487.001

Granovetter, M. (1973). The Strength of Weak Ties. American Journal of Sociology, 78, 1360-1380. doi: 10.1086/225469.

Grootaert, C. (1999). Social capital, household welfare and poverty in Indonesia. In Local Level Institutions Study Social Development Department Environmentally and Socially Sustainable Development Network The World Bank.

Grootaert, C. & Van Bastelaer, T. (2002). Understanding and Measuring Social Capital: A Synthesis of Findings and Recommendations from the Social Capital Initiative. Washington, D.C : World Bank

Grootaert, C. & Narayan, D. (2004). Local Institutions, Poverty and Household Welfare in Bolivia. World Development

Halstead, J. M., Deller, S. C., & Leyden, K. M. (2022). Social capital and community development: Where do we go from here?. Community Development, 53(1), 92-108.

Haridison, Anyualatha. (2013). Modal Sosial Dalam Pembangunan. Jurnal Ilmu Sosial, Politik dan Pemerintahan. doi:10.37304/jispar.v2i2.363

Hauberer, Julia. (2011). Social Capital Theory: Towards A Methodological Foundation. Prague: VS Verlag f Sozialwissenschaften & Springer Fachmedien Wiesbaden.

Hberer, Julia. (2011). The Founding Concepts of Social Capital - Bourdieu?s Theory of Capital and Coleman?s Rational-Choice Approach to Social Capital.

Hu, M., & Ye, W. (2020). Home ownership and subjective well-being: A perspective from ownership heterogeneity. Journal of Happiness Studies, 21(3), 1059-1079.

Huber, Peter & Montag, Josef. (2018). Homeownership, Political Participation, and Social Capital in Post-Communist Countries and Western Europe. ISE Working Paper, 8, doi:10.2139/ssrn.3109230

Hwang, E., Brossoie, N., Jeong, J. W., & Song, K. (2021). The impacts of the neighborhood built environment on social capital for middle-aged and elderly Koreans. Sustainability, 13(2), 756.

Lang, Robert T. & Steven P. Hornburg. (1998). What is Social Capital and Why Is it important to Public Policy. Housing Policy Debate, 9(1).

Lee, K. Y., & Jeong, M. G. (2021). Residential environmental satisfaction, social capital, and place attachment: the case of Seoul, Korea. Journal of Housing and the Built Environment, 36(2), 559-575.

Lefebvre, Virginie, Douglas Sorenson, Maeve Henchion, and Xavier Gellynck. 2016. ?Social Capital and Knowledge Sharing Performance of Learning Networks.? INTERNATIONAL JOURNAL OF INFORMATION MANAGEMENT 36 (4): 570?579. doi:10.1016/j.ijinfomgt.2015.11.008.

Leviten-Reid, C., & Matthew, R. A. (2018). Housing tenure and neighbourhood social capital. Housing, Theory and Society, 35(3), 300-328.

Lin, N., Ye, X., & Ensel, W. M. (1999). Social support and depressed mood: A structural analysis. Journal of Health and Social Behavior, 40(4), 344?359.

Manturuk, K., M. Lindblad & R. Quercia. (2009). Homeownership and Social Capital Among Low to Moderate Income Family. Journal of Urban Affairs, 32(4), 471 ? 488 doi:10.1111/j.1467-9906.2010.00494.x

Miranda, A.A., Le Borgne, YA. & Bontempi, G. New Routes from Minimal Approximation Error to Principal Components. Neural Process Lett 27, 197?207 (2008).

Mok, D., Wellman, B., and Carrasco, J. (2010). Does Distance Matter in The Age of The Internet?. Urban Studies, 47(13), 2747-2783. doi: 10.1177/0042098010377363

Muzayanah, Irfani F.U., Nazara, Suahasil, Mahi, Benedictus R. & Hartono, Djoni. (2020). Is There Social Capital in Cities? The Association of Urban Form and Social Capital Formation in The Metropolitan Cities of Indonesia. International Journal of Urban Sciences. 24-4. 532-556. doi: 10.1080/12265934.2020.1730934

Portes, A. & Landolt, P. (1996). The Downside of Social Capital. The American Prospect, 26: 18-21.

Putnam, Roberst D. (1993). The Prosperous Community: Social Capital and Public Life. American Prospect, 13, Spring, 35- 42. In Elinor Ostrom and T.K. Ahn. 2003. Foundation of Social Capital. Massachusetts: Edward Elgar Publishing.

Putnam, Roberst D. (1995). Bowling Alone: America?s Declining Social Capital. Journal of Democracy, 6 (1), 65-78.

Putnam, Roberst D. (2007). E Pluribus Unum: Diversity and Community in the Twenty-first Century The 2006 Johan Skytte Prize Lecture. Scandinavian Political Stuies, 30(2), 137174. doi:10.1111/j.1467-9477.2007.00176.x

Retsinas, & Belsky, E. S. (2002) Low-income Homeownership: Examining the Unexamined Goal. Washington DC: Brookings Institution Press.

Rohe, W. M. & Stewart, L. S. (1996). Home Ownership and Neighborhood Stability. Housing Policy Debate, 7(1), 37-81.

Rohe, W. M. & Stegman, M. A. (1994). The Impacts of Home Ownership on the Self-Esteem, Perceived Control and Life Satisfaction of Low-Income People. Journal of the American Planning Association, 60(1), 173-184. doi: 10.1177/004208169403000108

Rupasingha, A., Goetz, S. J., & Freshwater, D. (2006). The Production of Social Capital in US Counties. Journal of Socio-Economics, 35(1), 83-101. doi: 10.1016/j.socec.2005. 11.001

Saunders, P. (1990). A Nation of Home Owners. London: Unwin Hyman. doi:10.1177/ 030913259101500330

Subiyantoro, Slamet. (2011). The Interpretation of Joglo Building House Art in The Javanese Cultural Tradition. Mudra, 26-3, 221-231

Stack, Carol. (1983). All Our Kin: Strategies for Survival in a Black Community, Basic Books: New York.

Stock, J.H. & Yogo, M., (2005). Testing for Weak Instruments in Linear IV Regression. In D.W.K. Andrews & J.H. Stock (eds.) Identification and Inference for Econometric Models Essays in Honor of Thomas Rothenberg. Cambridge: Cambridge University Press, 80-108.

Strauss, J., Sikoki, B., & Witoelar, F. (2016). The Fifth Wave of The Indonesia Family Life Survey (IFLS5): Overview and Field Report. Santa Monica: RAND.

Strauss J., Witoelar, F., Sikoki, B., & Wattie, A.M. (2009). The Fourth Wave of The Indonesia Family Life Survey (IFLS 4): Overview and Field Report. Santa Monica: RAND.

U.S. Census Bureau. (2021). Homeownership in the United States: 2005 to 2019. Washington: U.S. Census Bureau

Van de Bunt, G.G. (1999). Friends by Choice: An Actor-Oriented Statistical Network Model for Friendship Networks in Time. Amsterdam: Thela Thesis

Van Der Gaag, M., & Snijders, T. A. B. (2005). The Resource Generator: Social Capital Quantification with Concrete Items. Social Networks, 27(1), 1?29. doi: 10.1016/j.socnet. 2004.10.001

Van der Meer, T. G. L. A., & Tolsma, J. (2014). Homeownership and social capital: An empirical study using Dutch survey data. Urban Studies, 51(12), 2558-2575. doi: 10.1177/0042098013518518

Woldoff, R. A. (2002). The Effects of Local Stressors on Neighborhood Attachment. Social Forces, 81(1), 87?116. doi: 10.1353/sof.2002.0065

Woolcock, M., & Narayan, D. (2001). Social Capital: Implications for Development Theory, Research, and Policy. The World Bank Research Observer, 15(2), 225?249. doi:10.1093/wbro/15.2.225

Woolcock, M. (2001). The Place of Social Capital in Understanding Social and Economic Outcomes. Isuma: Canadian Journal of Policy Research, 2(1), 1-17

Wooldridge, J.M. (2006). Introductory Econometrics: A Modern Approach. 3rd Edition.

Yoo, C., & Lee, S. (2016). Neighborhood built environments affecting social capital and social sustainability in Seoul, Korea. Sustainability (Switzerland), 8(12), 1?22. doi:10.3390/su8121346






Research Articles