Scandinavian Working Papers in Economics
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Department of Economics, Aarhus School of Business, University of Aarhus Working Papers, Department of Economics, Aarhus School of Business, University of Aarhus

No 05-6:
The Long and Winding Road: Social Capital and Commuting

Odile Poulsen () and Gert Tinggaard Svendsen ()

Abstract: We develop a two-sector model to analyze which kind of social

organization generates trust. Social capital is de…ned as trust. We examine two

communities: the bedroom community in which people commute long distance

to work and the virility community in which people do not commute to work.

The hypothesis is that people do not have time to interact spontaneously out-

side work in the bedroom community. We show that in the bedroom community

social capital cannot accumulate. Hence our results show that time spent in-

teracting with your neighbor must be added as an important production factor

when considering the formation of social capital in society. Thus, in a commu-

nity where agents only interact when producing output, social capital may not

accumulate To our knowledge, no such attempt to model social capital has yet

been undertaken and this gap or ‘missing link’in economic debates has to be

developed to grasp a more holistic understanding of the big di¤erences in the

wealth of nations or regions

Keywords: Social capital; Two-Sector Model; Indeterminacy; (follow links to similar papers)

JEL-Codes: A12; C61; D90; O41; (follow links to similar papers)

27 pages, September 2, 2005

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