The Cost of Segregation in Social Networks

30 Pages Posted: 8 Jun 2013

See all articles by Nizar Allouch

Nizar Allouch

Queen Mary, University of London

Date Written: June 7, 2013


This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an “asymptotic neutrality” of redistributive policies.

Keywords: Public Goods, Segregated Society, Private Provision, Networks, Bonacich Transfer Index

JEL Classification: C72, D31, H41

Suggested Citation

Allouch, Nizar, The Cost of Segregation in Social Networks (June 7, 2013). FEEM Working Paper No. 52.2013, Available at SSRN: or

Nizar Allouch (Contact Author)

Queen Mary, University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics