FinalThesis

The Dynamics of Social Capital and its Effects on Individuals in Sun Valley
Presented as an Undergraduate Honors Thesis in the Department of Sociology
University of Colorado, Boulder
For Graduation in May 2003
By Daniel J. Kaskubar
Committee Members:
Tom Mayer, Sociology
Terra McKinnish, Economics
Brett Johnson, Sociology

The Dynamics of Social Capital and its Effects on Individuals in Sun Valley
Presented as an Undergraduate Honors Thesis in the Department of Sociology
By Daniel J. Kaskubar
Abstract
Using the individual as the unit of analysis, I generate a new theoretical framework for
conceptualizing social capital combining the aspects of sources, trust, range, endowment,
and use. I hypothesize that increases in individual well being in poverty-stricken
populations are often initially generated and facilitated through the use of social capital. I
interview individuals living in the poor community of Sun Valley and, by applying the
new schematic, evaluate each respondent’s total social capital portfolio. I find that
greater endowment and use of social capital is consistent with higher incomes and more
contentment in life. The aspect of trust is found to have most impact on emotional well
being, and the aspect of range is found to have most impact on economic well being.

Contents
Introduction: What is Social Capital? 7
Chapter 1: Defining and Conceptualizing Social Capital 10
Chapter 2: Four Relevant Sections of Study on Social Capital 21
Chapter 3: My Conceptualization of Social Capital 28
Figure 1 41
Figure 2 44
Chapter 4: Methods and Study Design 45
Chapter 5: Results: Interview Data 57
Chapter 6: Results: Discussion of Findings 89
Figure 3 91
Figure 4 92
Figure 5 94
Chapter 7: Concluding Remarks 97
Appendix: Interview Guide 99
Bibliography 104

Introduction
What is Social Capital?
It is usually not necessary to have a car in Boulder, CO, because of the
magnificent bus system. I can take buses virtually wherever I want to go. However,
there are times when I need to get an errand done in a short period of time. In such an
instance, a car is very useful, but I do not own one. The obvious solution, when it would
be much more useful to have a car than to take the bus, is to borrow one. There are many
people I know who own cars, yet they are not constantly using them. It seems logical
that I would be able to borrow a car for a brief period of time, if the relationship is strong
enough to respect such a request. Herein lies the key to social capital – a relationship
between two or more people that can increase an individual’s consumption (or other)
opportunities, thereby increasing his or her well being. Even though I don’t own a car, I
can still have access to one (or many). In fact, since coming to Colorado about three and
a half years ago, I have borrowed over 30 different cars! A few of my friends have even
given me copies of their car keys.

Introduction
8
The phenomenon described above is just one of many varying examples of social
capital. One might go to a party to do some “networking.” We go on the internet to “get
connected.” We may even play the Kevin Bacon game, connecting him to other stars
through a string of movies. Social capital plays a huge part in our lives, yet many of us
pay little attention to it.
It is important to note that one can be part of an environment with a great deal of
social capital without ever making explicit use of it. Because of this, it is necessary to
differentiate between endowment and use. In addition, this differentiation makes it
difficult to define and measure social capital, especially through personal surveys and
general indicators. These topics will be explored in depth below.
Researcher’s Hypothesis
It is my hypothesis that social capital plays a crucial role in the creation of
economic well being for individuals. This is especially true for individuals without other
forms of capital to build on, namely, those who are poor. In fact, the researcher believes
that, based on theoretical inference, increases in individual well being in poverty-stricken
populations are often initially generated and facilitated through the use of social capital,
which provides access to capital outside the ownership of the individual. When
endowments of social capital are used, it creates more opportunities for wealth creation
for the individual, regardless of other capital sources they may have under their
jurisdiction.
In addition to testing this hypothesis, it is my intention to better ascertain the
dynamics of social capital as they relate to the research population (Sun Valley

Introduction
9
neighborhood in Denver, CO) and other neighborhoods like it. This paper serves two
functions, then: First, to evaluate whether or not the use of social capital is a precursor to
individual economic improvement, and second, to critically evaluate how social capital
functions among individuals in Sun Valley.

Chapter 1
Defining and Conceptualizing Social Capital
Social Capital Defined
Economists and sociologists differ in their conceptualizations of social capital.
Economics, which is commonly thought to be a “harder” science than sociology, has
generally approached social capital in terms of “mathematical equations describing how
one person’s utility may be influenced by the behavior of others.”1
In contrast,
sociologists take a much more human-centered, conceptual view, most often defining
social capital generically as the set of interactions between individuals.
The Economist’s View of Social Capital
Let us understand that utility is the root variable in economics. It can be defined
as the basic measure of an individual’s satisfaction or well being. Utility is increased
through consumption, as a person chooses to purchase goods that suit his or her desires.

Chapter 1
11
In turn, consumption opportunities are increased by a number of different variables, one
of which is wealth. Finally, a large part of a person’s wealth comes from his or her
income. This 4-tiered model is an example of how an economist might explain the
importance of income on well being. Everything in individual-specific economics
ultimately comes back to utility.
In order to have income, a person needs to produce. Usually, this consists of
productive labor capacity. A person agrees to exchange his or her labor for income,
which can then be used in the manner described above to increase utility. However, there
is one other factor of production in economics: capital.
It is difficult to get a concise definition of capital. In the early 20th
century,
Bohm-Bawerk (an Austrian economist) defined capital as a “produced means of
production.” This implies that capital exists because of someone else’s past labor.2
Produced goods can be thought of, then, as stored wealth. A person’s wealth, in turn, can
be used in three ways: direct personal consumption, trading or selling for more favorable
goods and services, and investment for further use. When produced goods are used as a
way to invest in future production or wealth, it is considered capital. The subtle but
crucial distinction is that it is not the good, but the use of the good, that defines it as
capital. This definition, then, is one based on function, and not on any distinct properties
within the good, other than the fact that it can be utilized in such a manner. Narayan and
1
Debertin 2002
2
The one exception to this is natural capital. Of course, human labor did not “create” the land or the
natural resources we use, but it did provide us with better access to the inherent characteristics within these
endowments. Irrigation and fertilization can greatly increase the productivity of land, and modern
technology allows us to extract oil and many other resources to make use of them. This missing attribute is
one negative consequence of the conceptualization of “natural capital.” However, land and resources can
be invested in, which is a crucial attribute of capital. Therefore, this classification is slightly ambiguous.

Chapter 1
12
Pritchett give it a similar definition as “stuff that augments incomes but is not totally
consumed in use.”3
Using the above description, capital must be thought of as a stock of assets one
owns (or has direct access to), which can be used for the sake of future investment and/or
wealth creation, leading to greater individual utility. Specifically, we can measure
natural capital by the amount of land, animals, and other natural resources one owns or
has access to. Physical capital can be measured by the amount of structures, equipment,
and machinery one owns, as well as the quality of physical infrastructure one has access
to (roads, energy, airports, etc). Likewise, it is easy to measure financial capital based on
the amount of money assets one has in his or her bank accounts and portfolios. Human
capital can be measured by one’s health and nutritional level and the amount of training,
education, and work experience one has under his or her belt (a person’s “productive
capacity”).
By extension, social capital also must refer to a “stock” of some form or another.
It has been the consensus that social capital requires the measurement of the quantity and
quality of relationships and networks one has access to, and this can be a very difficult
task indeed. Instead of observing one individual, we must venture outside that individual
to view the “relational climate”, per se, that they are seated in. For many economists, this
is a step they are unwilling to take. Profit maximization and utility functions are
inherently oriented with an individual (or individual company), not with
conceptualizations of altruism that relate one person’s utility to another. Of course, there
are a few economic theories that do take this step (game theory, for example).
3
Narayan and Pritchett 1999: 871

Chapter 1
13
In addition, social capital must have certain attributes that make it operate in the
same way as other forms of capital. It must be able to be “produced by labor,” as well as
be able to be invested in. The labor, in this case, is in the form of conversations and
building and maintaining relationships. Labor can be thought of as an investment of
one’s time and resources; therefore, we can consider a person building a relationship as
“investing in social capital”. Relationships can be invested in monetarily through buying
someone lunch or giving them a gift. Usually, these investments are best coupled with
the investment of labor – merely giving someone money for lunch does not do as much
for the relational climate as going out together, eating and conversing together, then
footing the bill.
Maurice Schiff, development economist for the World Bank, has offered an
economist’s definition of social capital as, “The set of elements of the social structure
that affects relations among people and are inputs or arguments of the production and/or
utility function.”4
This macro-level definition conflicts with the assumption that most
economists are concerned only with the individual applications of such a concept.
Indeed, the literature of social capital in economics is split between these two groups.
Economists are concerned with individual-level utility, but many are also concerned with
empirically-driven overarching principles, which can be applied to a variety of
populations.
That stated, economists have most embraced the concept of social capital when
researching economic development in less-developed countries (LDCs). In traditional
growth-accounting models, there has been a great deal of variability between nations of
similar inputs and all other forms of capital (physical, natural, human, and financial).

Chapter 1
14
The growth of the “East Asian Miracles” is one such example. Given standard
endogenous variables, only 17 to 36 percent of their growth can be explained.5
It is
thought that one possible cause for the variance is the social and political climate within
which the economic policies operate. In other words, economists are using the concept of
social capital at a macro level in order to attempt to explain variance in growth. In this
way, if social capital can be effectively measured, widespread policy implications can be
initiated to speed up overall growth in many countries worldwide.
The Sociologist’s View of Social Capital
Capital itself is an economic term, and as such, not much literature has been
produced within sociology under the “capital microscope”, as has been the case in
economic literature. Yet, many other species of the same genus have been written on.
For example, Pierre Bourdieu, a French sociologist, first coined the term “cultural
capital,” referring to much the same thing that has been discussed thus far.6
Also
included in this literature are topics such as “community development.” In addition, the
interpersonal linkages through which social capital packs its punch form the base of the
discipline of sociology.
Perhaps the most profound contemporary sociological work on the subject of
social capital is Alejandro Portes’, “Social Capital: Origins and Applications in Modern
Sociology.”7
In this essay, Portes evaluates current definitions of the term, including a
few economists’ perspectives. He starts by making the reader aware that social capital,
4
Schiff 1992 from Portes 1998: 6
5
Grootaert 1998: 13
6
Bourdieu 1985
7
Portes 1998

Chapter 1
15
indeed, is not a new concept in the field of sociology. In fact, he dates it back to
Durkheim’s study on group life and its relation to anomie and self-destruction as an
example of research on the profound influence of one’s participation in community on an
individual’s circumstances.
The value of the interactions between people is the primary concern of those
researching within the discipline. One variable that has had considerable attention has
been trust. The more two individuals trust each other, the more they are willing to share
and invest in the relationship. One can think of this in a cyclical fashion – as trust levels
increase between two people, they begin to share more and more intimately and become
more and more open to each other. As these potential vulnerabilities are handled with
care, more trust develops, which increases overall trust in the relationship. When trust
increases in a number of different individuals, they can even form coalition groups.
These kinship groups (or subgroups), as sociologists most often call them, create a
powerful sense of belonging within each member.
The most basic form of kinship group is a family. Within this context, members
can find a safe place to “come home to.” Of course, there can be negative interactions,
which can deteriorate this group, to such extent as to completely eliminate any sort of
kinship bond that might have previously existed. We shall come back to this crucial
distinction later on in this paper. Because of the important dynamic of the family, it has
been thought of as one of the main sources of social capital.
Despite these contributions to the discussion of social capital, sociology has been
criticized for its lack of empiricism. Many overarching theories describing interaction
remain difficult to define for reality, as it exists today (such as modern Marxism, which

Chapter 1
16
did not include considerations of entrepreneurship). Indeed, many modern sociologists
disagree on the concept of a singular reality to begin with. Quantification is not
sociology’s strength, and the attainment of an actual value that these interactions might
have to an individual has never (to my knowledge) been attempted within the discipline.
The topic of social capital is, nonetheless, extremely important to the discipline of
sociology.
Further Considerations on the Conceptualization of Social Capital
Where the economists are likely to become uncomfortable happens to be where
sociologists get excited. While economists are trying to quantify the theory of social
capital in order to directly prescribe its applications around the world, many sociologists
are still attempting to define the scope of the “relational climate” as previously described.
On the other hand, it is apparent that by defining the macro-level climate of a country,
economists have taken the step and defined this scope. Before we can go any further, we
must find the bounds by which we can measure and analyze the concept of social capital.
There are three distinct conceptualizations of the scope of the relational climate,
as it influences well being. These conceptualizations have been compiled and
summarized by Christiaan Grootaert, in a paper he produced for the World Bank, entitled,
“Social Capital: The Missing Link?”8
The first conceptualization he attributes to Robert
Putnam, who conducted a study in northern Italy comparing civic engagement with
quality of government (he also recently published a book called Bowling Alone,9
in which
he uses data from a wide variety of studies to show that social capital is on the decline in
8
Grootaert 1997
9
Putnam 1995

Chapter 1
17
the United States). In his study, Putnam views the climate of social capital to consist of a
set of “horizontal associations” between people.10
This narrow definition refers to those
interactions between individuals and groups with shared interests and common goals.
Together, these horizontal associations create a civil structure that encourages civil
leaders to be responsible in governing their constituencies.
The second conceptualization of the relational climate is attributed to James
Coleman. In his essay, “Social Capital in the Creation of Human Capital,”11
he includes
horizontal as well as vertical associations between people. This addition includes
hierarchical relationships, such as patron-client relations and employer-employee
relations. A person with a great deal of vertical, as well as horizontal, relationships will
obtain greater access to higher levels of well being through these connections (as long as
they are not oppressive, which can often be true in the patron-client case). Coleman
specifically defined social capital by its function as:
A variety of entities with two elements in common: They all consist of some
aspect of social structures, and they facilitate certain action of actors – whether
persons or corporate actors – within the structure.12
Perhaps it need not be stated that this is quite a vague and removed definition.
The third conceptualization of the relational climate is attributed to North13
and
Olson14
. This “most encompassing view,” as stated by Grootaert, also includes the social
and political environment within which individual actions take place. Variables such as
the type of government, the court system, civil and political liberties, and the economic
10
Putnam, Leonardi, and Nanetti 1993
11
Coleman 1988
12
Coleman 1988 from Portes 1998: 5
13
North 1990
14
Olson 1982

Chapter 1
18
system are included in this perspective. These systems enable norms to develop and also
guide the shape and structure of an individual’s interactions within society.
These conceptualizations differ in scale. Putnam attributes social capital to
communities, Coleman to communities in relation to governments and entities with
greater influence, and North and Olson include government as a whole [this includes, but
is not limited to, political stability, Gastil’s measures of civil and political liberty,
measures of expropriation of risk, corruption, enforcement of contracts and property
rights, measures of political and economic discrimination and social disintegration
(crime, suicide, riots, illegitimacy, divorce, etc.)].
This third conceptualization, while encompassing, is problematic. Development
economists prefer this definition because it has more direct relation to macroeconomics
as a whole. However, sociologists have argued that this conceptualization brings with it
issues of tautology. The sociologist Talcott Parsons, through processes he defined as
institutionalization and internalization, described in detail the effects of a social system
on individuals.15
Through institutionalization, individuals in society create structures that
serve their needs. Through internalization, each individual makes personal sense of these
institutions as they relate to the person. Incorporating such variables as the political and
economic environment leaves a classic chicken-and-egg question as to which came first:
the individuals who created the institutions, or the institutions that shaped the behavior
and interaction of the individuals. Portes, a sociologist critical of the current literature of
social capital, has this to say:
The intellectual journey that transformed social capital from an individual
property into a feature of cities and countries tended to disregard [the question of
tautology]. The journey was fast, explaining major social outcomes by re-
15
Parsons 1951

Chapter 1
19
labeling them with a novel term (social capital) and then employing the same
term to formulate sweeping policy prescriptions. While I believe that the greatest
theoretical promise of social capital lies at the individual level… there is nothing
intrinsically wrong with redefining it as a structural property of large aggregates.
This conceptual departure requires, however, more care and theoretical
refinement than that displayed so far.16
Those who have tried to extend social capital to broader interpretations have not
effectively considered these barriers to the legitimacy of their research.
There are many other conceptualizations of the phrase, most of which have been
based on the purpose and functionality of social capital. One is that social capital is a
“soil” in which other capital is planted.17
This claim suggests that the quality of social
capital makes investments of other forms of capital more or less effective. Coleman,
Olsen, and Putnam all agree on this point, which is interesting since it is invariably a
macro-level claim. Others have similarly described it as the glue that holds society
together. Still others state the concept as a measure of satisfaction with the way people
interact. Another group defines it as the availability of opportunities, resources, and
advantages. Many of these definitions, however, do not elaborate theoretically. The lack
of detail makes it difficult to accomplish any form of sophisticated work using these
definitions. Finally, Portes also offers a definition of his own, which he states is
becoming the most-agreed upon conceptual basis:
Social capital stands for the ability of actors to secure benefits by virtue of
membership in social networks or other social structures. This is the sense in
which it has been more commonly applied in the empirical literature…. Whereas
economic capital is in people’s bank accounts and human capital is inside their
heads, social capital inheres in the structure of their relationships.18
Applying these definitions, social capital is an abstract concept that cannot explicitly be
agreed upon. Nevertheless, the buck does not stop there. To do research of any kind, a
16
Portes 1998
17
Grootaert 1997: 7

Chapter 1
20
definition must be established to use as a basis for operationalization, and in turn,
application to the world in which we live.
18
Portes 1998: 6-7

Chapter 2
Four Relevant Sections of Study on Social Capital
Measuring the concept of social capital requires much more detail than any
definition. Even with the scope of the relational climate defined in any of the three
conceptualizations previously outlined in chapter one, how does one “measure” a
relationship as a stock from which utility can be derived? Most previous research in the
social capital literature has been conducted using surveys with many different indicators.
For instance, in evaluating a person’s relational climate, one can obtain information on
the amount of trust a person has for their neighbors, coworkers, or family members.
Researchers have also tried to calculate social capital by evaluating the number of groups
an individual is a part of and participation level in those groups (usually by asking about
ranking positions, frequency of activity, etc.).

Chapter 2
22
Previous Research
Much of the theoretical literature has already been outlined in the discussion of
the definition of social capital. I am concentrating on research that is geared toward four
areas, which I believe are most relevant to my study: (1) linking social capital to
economic improvement in a macro sense, (2) social capital as an individual phenomena,
(3) social capital and its effects on employment (especially in poor neighborhoods), and
(4) social capital as a causative variable. This discussion will lead into my
conceptualization of social capital.
The first section of research, geared toward linking social capital to economic
improvement on a macro level, has been dominated by development literature. The most
notable of these studies is one by Narayan and Pritchett entitled, “Cents and Sociability:
Household Income and Social Capital in Rural Tanzania.”19
This discussion is not
centered on the individual as the actor; rather, they use a household as the unit variable.
By using “…a specially designed large scale survey… to measure the degree and
characteristics of associational activity, as a process for social capital”, they find that,
“…a one standard deviation increase in the village social capital index… is
associated with at least 20 percent higher expenditures per person in each
household in the village…. The link… shows convincingly this effect is social
and operates at the village level. The social capital of a household’s village is as
important in determining a household’s income as many of the household’s own
characteristics which receive a great deal of attention (e.g. schooling, assets or
distance to markets, gender of household head). Social capital is an important,
and so far largely missing, dimension of income and poverty analysis.”20
This article appeared in an economic development journal, and was conducted as
research for the World Bank, the government of Tanzania, and the University of Dar Es
Salaam.
19
Narayan and Pritchett 1999
20
Ibid, from the article’s conclusion

Chapter 2
23
Another notable study within this first section of research was conducted by
Knack and Keefer.21
In this study, the authors are also concerned with development,
especially in poor countries and “poor areas of industrialized countries.” They use the
World Values Surveys to sample 29 market economies across the globe, and they find
that, “trust and civic norms are stronger in nations with higher and more equal incomes,
with institutions that restrain predatory actions of chief executives, and with better-
educated and ethnically homogenous populations.”22
However, this study is ambiguous
in terms of causation. It is difficult to say whether increased economic activity increases
trust and civic activity, or if the link is the other way around.
Finally, a study conducted by Paul Whiteley23
has similar findings. He samples
data from 34 different countries and finds that:
“Social capital has an impact on growth which is at least as strong as that of
human capital or education, which has been the focus of much of the recent work
on endogenous growth theory. It appears to have the same impact on growth as
catch-up or the ability of poorer nations to adopt technological innovations
pioneered by their richer counterparts.”24
Whiteley does not stop at a relation between economic growth and social capital, but also
ventures to state in his conclusion that, “Social capital… originates in primary groups,
principally the family, rather than in secondary groups such as voluntary organizations.”
This idea of the family having a chief influence on an individual’s social capital is an
important one, and one that leads us into the next section of research.
The second section of research concentrates on the individual as an actor as
opposed to the family or household. When this distinction is made, the family becomes a
crucial source of social capital for the individual, instead of being considered as having
21
Knack and Keefer 1997
22
Ibid: 1251
23
Whiteley 2000

Chapter 2
24
the same resources of social capital as the individual. Pierre Bourdieu, who has been
credited with coming up with the first modern analysis of social capital, was a proponent
of treating the concept at an individual level. His classic work, “The Forms of Capital,”
focuses on the benefits an individual receives through participation in subgroups.25
Sanders and Nee26
added to this topic with their article, “Immigrant Self-
Employment: The Family as Social Capital and the Value of Human Capital.” In this
article, the authors research self-employment among Asian and Hispanic immigrants.
Because self-employment is important in the economic advancement of immigrants,
social capital in this setting is also very important. The authors state that the family is
crucial in facilitating the “pooling of labor power and financial resources”27
of the self-
employed. They also find that, “…being married is associated with a 20 percent
advantage in the net odds of self-employment.”28
This is manifest most greatly in regards
to Korean women. For them, the odds of self-employment are 350% greater if they are
married.29
The authors conclude by stating that immigrants have access to informal
credit markets and interpersonal bonds that aid in starting an individual’s business.
A study by Brehm and Rahn30
is also a noteworthy article on individual-level
analysis of social capital. The authors state, “Although normally conceived as a property
of communities, the reciprocal relationship between community involvement and trust in
24
Ibid, from the article’s abstract
25
Bourdieu 1985
26
Sanders and Nee 1996
27
28
Ibid: 240
29
Ibid: 241
30
Brehm and Rahn 1997

Chapter 2
25
others is a demonstration of social capital in individual behavior and attitudes.”31
They
continue:
“…‘communities’ do not join the PTA or enlist in farming organizations, parents
and farmers do. The collective manifestation of social capital must be
sustainable at the level of individual civic engagement and in individual attitudes
towards others…. In and of itself, identification of the aggregate phenomenon at
an individual level is an important advance in evidence supporting the social
capital idea.”32
In evaluating social capital at an individual level, we can better understand its effects and
processes. There have been a couple of other articles reiterating these points, namely,
those by Jackman and Miller.33
In addition, Portes34
adheres to the assessment of social
capital at the individual level, and notes the importance of including the family in the
assessment of an individual’s social capital resources.
The third section of research has greater significance on the substance, rather than
the methodology, of my study. There has been a growing literature on the effect of social
capital on a person’s ability to get a job.35
One of the more famous works dealing with
this issue is Wilson’s When Work Disappears.36
He notes that informal job networks are
helpful in attaining some forms of employment. Data from the Urban Poverty and
Family Life Study helps him prove his point, and he quotes one woman from the study:
A lot of people get good jobs because they know friends, and they work there. If
you know somebody that’s been working in an established company for a long
time, and they tell you to come in and fill an application, you can get a job. It
always pay to know somebody.37
31
Ibid: 999
32
Ibid: 1017
33
Jackman and Miller 1996a, 1996b
34
Portes 1998: 9-12, 21
35
See, for example, Bridges and Villemez 1986; Granovetter 1974; Lin, Ensel, and Vaughn 1981
36
Wilson 1996
37
Ibid: 65-66

Chapter 2
26
In addition to Wilson, there are other studies that note this important connection.
Fernandez, Castilla, and Moore38
analyze networks and employment at a phone center.
This study analyzes the labor market from the employer’s perspective, and finds that “the
firm’s investment in the social capital of its employees yields significant economic
returns.”39
An additional study by Reingold, Van Ryzin, and Ronda40
provides insight into
communities with a large percentage of public housing (Sun Valley certainly fits into this
category). In their study they investigate the effect of public housing on the labor force
activity of the residents. Using regression analysis, the results are inconclusive; no direct
effect is observed, but there are indirect effects through their “neighborhood
disadvantage” variable. Reingold conducted a previous study on his own showing that
“residents of poor urban communities face a labour market that is organized, in part, by
their networks of social relations.”41
The fourth and final section of literature that sheds light on my study has to do
with social capital as a causative (rather than a correlated) variable in economic
outcomes. Research in this area is limited, but important nonetheless. The most famous
of these is James Coleman’s, “Social Capital in the Creation of Human Capital.”42
In this
article, Coleman argues that the relationships between parents and children are crucial in
determining educational outcomes. Of course, it is also true that studies in the last
literature section, which indicate that social networks increase an individual’s opportunity
to find a job, have a certain causative aspect to them. Although perhaps not explicitly
38
Fernandez, Castilla, and Moore 2000
39
40
Reingold, Van Ryzin, and Ronda 2001
41
Reingold 1999: 1927

Chapter 2
27
stated, it is an individual’s social capital that allows him to receive the economic benefits
of a job.
42
Coleman 1988

Chapter 3
My Conceptualization of Social Capital
Definition of Social Capital
The definition I subscribe to is the one given by Portes at the end of chapter one.
Indeed, if we are going to consider social capital as “capital” at all, we must adhere to the
previously outlined principles and attributes of capital as defined by economists. In
addition, we must attempt to define two things. First, we must define who these “actors”
are. We have seen definitions that have defined these actors very differently. Some are
based only on individuals, some extend that to groups and organizations, and others
include governments as these actors. By deciding whom or what the actor is, we
inherently figure out our unit of analysis. Secondly, we need to define the scope of the
social networks and social structures. This, again, refers to the relational climate. By
deciding the scope, we limit the types of interactions that can be included under the
heading of social capital.

Chapter 3
29
By limiting the actors to individuals, we can greatly concentrate the objects of
what we are calling “social capital.” Recalling Portes, Parsons, and others, if we attempt
to make the actors anything larger than the individual (or perhaps the household), it is
difficult to figure out what has caused the changes of such masses. Limiting the actors to
individuals also carries with it more feasible economic calculations. Social capital, at this
point in time, is largely a micro-level concept. Without fully understanding the
relationship of social capital on individual welfare (indeed, there is much debate), we can
in no way attempt to make an accurate aggregate estimate. For the purpose of this study,
then, the researcher considers the actor (the unit of analysis) to be an individual (Brehm
and Rahn 1997; Whiteley 2000; Sanders and Nee 1996).
The scope of influence (or the scope of the relational climate, as referred to
earlier) must also be defined. There are three main spheres of influence. The first sphere
of influence is an individual’s personal relationships, including co-workers, friends and
family (one-on-one interaction). The second sphere is an individual’s interaction within a
subgroup or network (being a part of a club, organization, or kinship group). The third
and final sphere is an individual’s interaction with the greater society (i.e., institutional
structures) of which he or she is a part.
One might assume that the more intimate the relationship, the more direct effect
on a person’s well being. On the average, not all those living within the same socio-
political-economic environment are equally well off economically or otherwise (unless
that environment functions to provide such egalitarianism, such as the communist regime
in Cuba). We can reasonably explain this by the fact that the most intimate relationships
are the ones people also spend the most time investing in. Frank and Yasumoto comment

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30
that individuals are “most strongly influenced by members of their primary groups –
people with whom they engage in frequent interactions.”43
But not all best friends are
equally well off, either. This comes from the fact that there are many other variables that
influence a person’s well being. This paper does not attempt to provide evidence for all
of that influence, but rather the piece that social capital contributes, through cohesive
subgroups of which an individual is a part (family, workplace, church, etc.).
43
Frank and Yasumoto 1998: 643
How Social Capital Affects Well Being
Social capital relates to one’s economic well being in a variety of different ways,
and occurs through two distinct aspects of social capital, which must first be commented
on. The first aspect of social capital is trust. The more one is trusted, and can trust
others, to keep one’s word and be reliable, the more opportunities one might receive in
the future to be trusted again. As long as one proves to be worthy of another’s trust, the
cycle is self-reinforcing. We can parallel this to a credit history report as it relates to
financial capital. Once it becomes obvious that the person is reliable with personal
information and/or resources, the “interest rate” is lowered and the “risk of default” is
lowered.
As classic example of how the aspect of trust in social capital might relate to
one’s utility, the 18th
century philosopher and economist David Hume presents a parable:
Your corn is ripe today; mine will be so tomorrow. ‘Tis profitable for us both,
that I should labour with you today, and that you should aid me tomorrow. I
have no kindness for you, and know you have little for me. I will not, therefore,
take any pains upon your account; and should I labour with you upon my own
account, in expectation of a return, I know I should be disappointed, and that I
should in vain depend upon your gratitude. Here then I leave you to labour

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alone; you treat me in the same manner. The seasons change; and both of us lose
our harvests for want of mutual confidence and security.
This example demonstrates how lack of trust can lead to a decreased level of social
capital, and in turn, utility. If there were a greater level of trust in this case, both harvests
might be saved. This is also possible through the use of enforceable contracts.
The second aspect of social capital is range. This aspect refers to the breadth of
the relational climate from which an individual can draw personal benefit. The broader
the spectrum of friends, family, and acquaintances, as they cross social boundaries (race,
gender, profession, education, socio-economic class, etc.), the more social capital
resources are available to an individual. Another negative example can serve as an
enlightening grounding for this distinction. This can be seen by William Julius Wilson’s
analysis of inner city communities in his aforementioned book, When Work Disappears:
…it appears that what many impoverished and dangerous neighborhoods have in
common is a relatively high degree of social integration (high levels of local
neighboring while being relatively isolated from contacts in the broader
mainstream society) and low levels of informal social control…. In such areas,
…children are disadvantaged… because the social interaction among neighbors
tends to be confined to those whose skills, styles, orientations, and habits are not
as conducive to promoting positive social outcomes (academic success, pro-
social behavior, etc.)44
Alejandro Portes raises these same concerns,45
and recognizes the works of others such as
Fernandez-Kelly46
on the topic:
In her analysis of teenage pregnancy in Baltimore’s ghetto, [she] notes how the
dense but truncated networks of inner-city black families not only cut off
members from information about the outside world, but simultaneously support
alternative cultural styles that make access to mainstream employment even more
difficult. In this isolated context, teenage pregnancy is not the outgrowth of
carelessness or excess of sexuality but, more commonly, a deliberate means to
gain adult status and a measure of independence.47
44
Wilson 1996: 63
45
Portes 1998: 16
46
Fernandez-Kelly 1995
47
Portes 1998: 14

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Indeed, a lack of range can severely damage an individual’s well being (utility).
Perhaps the best example of this is a street gang, whose members often see only other
members for long periods of time and whose values do not often promote positive social
outcomes. If an individual gets “caught up” (is that not the language we use?) in a gang
for a long period of time, there can be serious consequences on his or her well being for
the rest of his or her life.
Range of social capital can be conceptualized in a slightly different way.
Increased range gives a person greater access to different subgroups that would otherwise
be out of her reach. Ties between subgroups provide “…access to unique influence and
information that can give an actor important advantages in the pursuit of resources or
position.”48
Granovetter has outlined these sorts of connections (he mentions the
“strength of weak ties”).49
In the case of a poor population such as Sun Valley, increased
range generally means more access to mainstream society.
Together, these aspects of social capital help us to conceptualize the way this
form of capital affects well being. Previous research on social capital indicates that there
are at least five distinct ways that social capital affects well being.50
The first one, as
presented above in Hume’s parable, refers to favors, and the reciprocation of those
favors.51
The second way is through collaborative efforts, where two or more persons
jointly act to solve community problems. The third way social capital affects well being
is by acting as collateral, or social pressure. The fourth is by increased communication
48
Frank and Yasumoto 1998: 644
49
Granovetter 1973, 1974
50
This section has been influenced in particular by the CPN Tools website (see bibliography)
51
Portes; Coleman; Grootaert; Putnam 1993: 3

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33
and information flows. Last, social capital can also act as a way of negating
opportunistic behavior by those outside an individual’s associational subgroups.
Favors
Favors, as described in Hume’s anecdote, refer to any preferential treatment given
by one person to another. In this case (had the two agreed on helping each other), the
preferential treatment is in the form of free labor. However, as economists tell us, there
is no such thing as a free lunch. It is merely subsidized because it is deemed a good
investment from the subsidizer. The economic rationality, then, for the one providing the
favor is in the return investment from the farmer he has helped. It is the assumption of
reciprocation that sparks the farmer to go about doing his kind deed. Therefore, there is
an element of risk involved in any such favor. It is possible that the favor will not be
reciprocated (the assumption could be false), in which case it is a bad investment.
Increasing trust, therefore, decreases the risk of the investment. Therefore, investing in
the relational climate improves the expected return of investment, which increases the
total amount of favors, leading to a further increase in trust. Again, there is a cyclical
effect.
The assumption of reciprocation is not always a motivating factor in a person
giving a favor, and should be noted. The alternative is that a person might actually gain
consumption value by helping people, like the true humanitarian (Mother Teresa comes
to mind). In this case, reciprocation is not needed as an assumption because there is
value in the deed itself. This is a bit of an anomaly. Because this person is consuming, it
is not an investment and should not be considered as affecting one’s stock of social

Chapter 3
34
capital. However, it is hard to deny that such acts do improve the relational climate. In
fact, if it is perceived on the part of the receiver of the favor that it was done without
expectation of repayment, it might even have a greater effect on the relational climate
than would the favor done with future expectations!
The final consideration here is that reciprocation may, in fact, never even be
wanted by those who provide favors. Indeed, those who have lent me their cars have
never asked for anything in return; often, I will fill the car with gas as a kind gesture, but
it is not required to maintain the relationship. I have given them nothing in return, yet
they continue to allow me to use their cars. It is possible that they just feel pity on me
and secretly despise me every time I ask them to take their prized possession for a spin,
but this seems a little far-fetched. In this case, the trust level of the relationship will not
decline if I do not reciprocate. Instead, there is a form of social cohesion that reinforces
the relationship even if the favor-giving is not necessarily two-way. Contrary to the
above example of consumption value in the favor, this example implies consumption
value in the relationship itself. Therefore, it is not “worth it” to the individual to break
off the relationship because of a lack of reciprocation. This might be best illustrated by
the provider of the car commenting, “I don’t care about the car; I care about you! Have a
good time!”
Collaborative Efforts
Another distinct way that social capital affects well being is through collaborative
efforts. In this case, two or more persons come together to achieve a mutual goal.
Sometimes, the resolution of a problem is beyond the reaches of an individual. However,

Chapter 3
35
with others helping, the problem can be solved. A good example of this is farming
equipment in Mexico. Many of the farms in Mexico are very small, and the farmers
cannot produce enough to afford tractors and other expensive equipment. To remedy
this, farmers will often come together and pool resources in order to buy a tractor. The
farmers then share the resources. James Coleman states:
Like other forms of capital, social capital is productive, making possible the
achievement of certain ends that would not be attainable in its absence…. In a
farming community… where one farmer got his hay baled by another and where
farm tools are extensively borrowed and lent, the social capital allows each
farmer to get his work done with less physical capital in the form of tools and
equipment.52
The concepts of time- and resource-sharing are common ones, and a similar
example can be identified in middle class America. My dad just got his pilot’s license,
and he is now thinking about buying an airplane. Used Cessna airplanes can cost
anywhere from $10,000 to $300,000. If my dad purchases a $20,000 airplane, it will
most likely be at least 25 years old, and will probably need a lot more maintenance work
than a $40,000 plane. Most pilots, my dad included, only want to fly on weekends or on
special trips, so it is not necessarily economical to buy a personal airplane. However,
sharing the purchase price and insurance costs with another person cuts the price in half,
meaning he can afford the $40,000 plane. This is a much more economical decision,
because my dad will not be using the aircraft all of the time anyway. There are many
pilots in the area, and they all use the same resource: the local airport. Since there is
only one airport, the pilots often see each other as they come in to rent an aircraft for a
couple hours. The airport provides a space for people to communicate about the possible
aircraft that are available to them, and collaborate if two or more of them are thinking of
52
Coleman from Putnam 1993: 3

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36
purchasing a plane. Such sharing can also be seen in roommate situations. Since
roommates allow the resources in an apartment or home to be used more across time, it is
cheaper on a per person basis.
Collateral
Yet another way social capital helps well being is through acting as collateral.
The best example of this is the Grameen Bank, a microcredit program started in
Bangladesh by Muhammad Yunus in 1976. Through this program, Mr. Yunus relies on
social networks to act as reinforcement on the repayment of loans.
The Grameen Bank loans out money to the poorest of the poor. As such, the
borrowers have no collateral. Instead, the program works by only loaning out to groups
of poor individuals (usually four). One individual receives a loan first, and the other
three individuals have to wait until that loan is repaid until they have the opportunity to
receive a similar loan. In this way, the incentives work such that social pressure acts as a
positive reinforcer of repayment. If the first borrower does not pay back the funds, he or
she has inherited three angry friends.
This type of reinforcement can also be observed in covenant communities all
across the United States. Social pressures act as a way to make sure people live within
agreed-upon bounds of things such as the number of pets, the look of one’s lawn, and the
color of one’s house. Such restrictions ensure that property values will remain at their
peak.

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37
Increased Communication
Additionally, social capital improves communication flows between people,
increasing their knowledge of what is going on around them. This form of social capital
is most visible in areas such as job searches. The simple rationale is that one cannot
apply for a job that he or she does not know about. With better information flows
through a greater amount of people, more opportunities are presented to each individual.
Not only does this form of social capital work at the individual level, but also it is
beneficial for the business the individual applies to (see the discussion of Fernandez,
Castilla, and Moore53
in chapter two). Since a greater amount of this form of social
capital means more people can hear about the job, the amount of applicants increases,
which increases the probability of the firm getting the best available candidate for the
open position.
In addition, information flows best influence social capital when they “amplify
information about the trustworthiness of other individuals.”54
Students of economics are
all too familiar with the prisoner’s dilemma. As Putnam notes, “[In such dilemmas,]
cooperation is most easily sustained through repeat play.”55
Counteracting Opportunism
Finally, social capital also acts as a good defense against opportunists. This is
especially true for those in poverty. This can be best elaborated by a specific example.
53
Fernandez, Castilla, and Moore 2000
54
Putnam 1993: 3
55
Ibid.

Chapter 3
38
Suppose there is a poor single mother (like many of the subjects in the
researcher’s study population), and that mother is not receiving child support payments
from the father. Indeed, this is against the law, but the opportunistic behavior of the
father is a result of the difficulty in enforcing the law. The mother simply cannot afford
(given the constraints of time and money) a lawyer to go through the due process of law
to bring about justice for herself. In such an instance, a social network is crucial. If the
mother is sufficiently “plugged in” to community resources, there is an increased chance
that it will get settled in court (or out of court). The existence of such groups, in turn,
deflects such attacks preemptively if the opportunist knows that the likelihood of
punishment is increased. This is the rationale behind the “Neighborhood Watch”
program.
Indeed, social capital can be used as a very powerful tool for the increase of
personal well being. It is this same power that, as some critics have pointed out, can also
decrease well being.56
Those in privileged positions can often exclude others from the
benefits they receive. Political scientists and economists have commonly dubbed this
“rent seeking” behavior. Another way to look at this same phenomenon is through the
lens of corporate and political favors and government corruption. Suharto’s regime in
Indonesia is a great example of this. He used his power to appoint his family members to
positions of power within the governmental structure, such as giving almost the entire
banking system to one of his sons.
56
See, for example, Portes 1996, 1998
Summary of My Conceptualization

Chapter 3
39
To summarize, let us examine the attributes of social capital we have discussed
thus far. First, we must define the unit of analysis (actor). For the purposes of this study,
the actor is synonymous with the individual. Second, we need to define the scope of
influence. In this study, the scope relates to a person’s friends, family, and acquaintances
(the initial scope of influence) as well as the subgroups, networks, and organizations that
person is a part of (the secondary scope of influence). It does not discuss the tertiary
scope (i.e., institutional structures); the respondents are within the same greater society
and this should not give much variance between the individuals interviewed.
Additionally, we must also consider the differences between endowment and use
of social capital. I consider endowment to be strictly the amount of individuals and
subgroups available to an individual. It is important to distinguish that this does not say
anything about the amount of resources a person has access to. To clarify, a farmer with
10 friends with one tractor each will be considered to have greater social capital
endowments than a person with one friend who owns 20 tractors. As this is a discussion
of an individual’s relational climate and not relational climate with wealthy people, this
has to be the case. The point here is that the climate in and of itself can have explanatory
power for a person’s well being. If I were to include a friend’s wealth in the analysis of
social capital, I would be making a grave error. Social capital, as I am defining it, refers
to a stock of relationships called upon to affect individual utility, and nothing else.
Inherent in the concept is the fact that relationships provide something to an individual,
regardless of the affluence of those with whom an individual has a connection.
The term use refers to any and all ways in which an individual calls upon a
relationship to affect well being. This is, in a sense, the most concise conceptualization

Chapter 3
40
of the term “social capital” because, as noted earlier, economists have defined capital as
such because it is used as a means to affect utility. In addition, the lack of use is worth
noting, especially if one is in a well-endowed environment. Finally, in order to correctly
evaluate a relational climate, we must take into account the positives and the negatives of
such use. This has been noted in the social capital literature and in chapter three.57
Other key attributes contained within social capital are those of trust and range.
Increased levels of both have a positive effect on one’s social capital. Increased levels of
trust are more common in intimate relationships with those whom a person spends a lot
of time. It is assumed that the more trust one has with another, the greater amount of
social capital (or, to state it a different way, the more friendly is the “relational climate”).
Trust can be increased voluntarily through repeated reciprocation or collaboration, or
increased through social pressure as it is used in collateral.
In contrast to the aspect of trust, increased levels of range are more common in
outlying relationships, with those whom a person spends less time. For instance, a person
working at a low-level position at a large company might have some sort of access (albeit
limited) to the top-level executives in the company. These individuals are most likely in
very different positions socially and economically, and therefore, they have access to
very different subgroups. As such, the time spent with the executive is limited but the
return value can be much greater.
The attributes listed above can be conceptualized graphically, as seen in figure 1.
In this case, the individual is endowed with four main source subgroups from which she
draws upon for personal benefit: her church, her family, her workplace, and her
neighbors. This model summarizes my conceptualization of social capital at the
57
Ibid.

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41
individual level, although it makes no reference to the five ways social capital functions
(favors, collaborative efforts, collateral, increased communication, and counteracting
opportunism, as previously discussed in this chapter).
Figure 1

Chapter 3
42
A Final Note on the Study of a Poor Population
It was previously stated that for sociologists, the concept of social capital has been
dubbed with other terms, such as “community development.” Inherent in this concept is
the effect of relationships on the communities that most need to develop (those that are
poor).
It is my conceptualization that a poor neighborhood’s basic economic properties
make it easier to recognize the effects of social capital. Using the theory of declining
marginal returns to capital, an economist notes that as capital increases, the return to
capital (or output) increases by smaller and smaller amounts. Nobel Prize Winner Robert
Solow most popularly described this effect in the macroeconomic arena of economic
growth, but it applies to individuals as well.
Consider a woman being paid to dig holes. She starts with her bare hands, and
progress is slow. However, soon she realizes that a shovel (physical capital) would
greatly increase productivity, and she buys one with the money she has made from
digging the first few holes. After that, she recognizes that there are different shovels that
could be used in different circumstances (rocky soil vs. clay soil), so she buys a
specialized shovel. One can conceive of her purchasing more and more shovels and
equipment for every small variant in soil. Even though these additional shovels and
equipment will increase productivity, they will not increase productivity at the same rate
as the first shovel did (see figure 2).
Extending this theory to the community of Sun Valley, the near-absence of capital
means that a small increase in capital will greatly increase output. As stated above,

Chapter 3
43
residents do not have access to many forms of capital. However, almost all of them have
access to minimal amounts of social capital. Basically, social capital makes up a larger
percentage of a poor individual’s overall capital than his or her middle- or upper-class
counterparts. If wealth is to be created, it needs to come from this source.
The effects of capital are cyclical. When a firm increases its amount of capital, it
increases its productivity. When productivity increases, profit increase, which in turn
allows the firm to invest in more capital. As noted by Putnam, social capital functions in
the same way.58
It is a self-reinforcing cycle that, once started, gets better and better. As
with other forms of capital, whoever has some is able to accumulate more. This wealth
accumulation model can be used to recognize the role social capital plays in the creation
of wealth, especially in poor neighborhoods.
Using similar rationale, as outlined by the utilitarian theory of declining marginal
utility, an economist notes that relatively speaking, an increase in the amount of wealth
for a rich person does not increase his or her utility as much as the same increase in the
amount of wealth does for a poor person. Basically, we can think of utility as having a
square-root function type of relationship to wealth (see figure 2).
58
Putnam 1995: 3.

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44
Figure 2: Output vs. Capital
(Utility vs. Wealth)
0
0
Capital (Wealth)
Output(Utility)
A utilitarian economist is effectively stating that when there is an increase in an
individual’s wealth, those who do not have a lot to begin with will have a greater increase
of “happiness” than a person who already has a large amount of wealth (the slope of the
line is greatest near zero and always decreasing). Conceptually, this means that a poor
person can do a lot to increase his or her well being (by buying food to keep from
starving) with a dollar, while a rich person will not have much use for that same dollar.
Crucial to this argument is the assumption that one can make comparisons
between two individuals’ amounts of utility. This is a controversial assumption, but one
that is made frequently. A good example is the decision-making process within the
political economy, where the vote rests on comparing the benefits of a project on one
group of people versus another.
An additional effect of the theories described above is that it should make it easier
to see differences in well being across individuals in Sun Valley. Since the people of Sun
Valley are poor, slight increases in the amount of wealth owned across individuals will
greatly increase their respective utilities. This makes it an ideal population to study.

Chapter 4
Methods and Study Design
I have conducted a qualitative study of the effects of social capital on well being.
Specifically, I tested my hypothesis that a person who invests in social capital (as the
researcher has defined, conceptualized, and operationalized it) starts a positive cycle that
generates more and more individual utility. As such, this research was aimed at finding
causation, and not only correlation, between the variables of social capital and well being.
The research was conducted in the community of Sun Valley, in Denver, CO.
This community was selected for two reasons. First, it was selected due to the
researcher’s experience and familiarity with the community. Secondly, the community is
the poorest one in Denver, and therefore carries with it the properties outlined in chapter
three. To complete the research, I created an interview guide (see appendix A) with
many open-ended questions designed to give the interviewee the power to talk as much or
as little about relationships as he or she desired.

Chapter 4
46
On the Qualitative Study
As a general note, it should be stated that the researcher has done qualitative
research in part because he is an undergraduate student who does not have the extensive
resources available to do an original statistically significant quantitative study. However,
it is not invalid that he is conducting the research in this way. Qualitative studies are
essential for understanding the inner workings of any subject studied quantitatively.
Social capital has many definitions and conceptualizations, and a well-constructed
qualitative study can help fuse these. The beauty and value of a qualitative study is in its
depth; it is my opinion that the concept of social capital could use more depth in its
construction.
Just what types of social capital are most important to a specific population? Is
there a distinct causal relationship between social capital and welfare? Many existing
qualitative studies using social capital indicators can estimate answers to these questions,
but nothing can be more accurate, and more valuable, than asking straight facts from
individuals themselves. Often, though, individuals see facts very different than reality.
However, one important aspect of social capital is that the perception is just as crucial as
the reality. As a placebo drug can heal a sick person, so an exaggerated perception of the
strength of a relationship can actually influence the strength of that relationship.
The other strength of a qualitative study is that it can more clearly establish
causation mechanisms. Once these mechanisms are established, they can be empirically
verified by future quantitative studies. Research is born when a person starts noticing
patterns in a limited number of observations, and tries to unify those patterns by
employing theory to study a statistically significant sample. Judging by the lack of unity

Chapter 4
47
on the topic of social capital, it is clear that these patterns of observation have not been
sufficiently developed.
On Sun Valley
Sun Valley is the poorest community in Denver. Not only is this population poor,
but many of the residents also have less access to physical capital than their richer
counterparts. This is made most tangible by the lack of private property available in the
community. The neighborhood consists predominantly of low-income public housing
(94 percent of the population lives in publicly subsidized housing), meaning there are
very few homeowners. Also, very few residents have financial portfolios or even savings
accounts, for that matter. All of the owner-occupied housing is located in the north end
of the neighborhood, as well as the church, the elementary school, and the
neighborhood’s only multi-level apartment complex, Decatur Place. Project housing
dominates the south end.
There are about 1500 people living within Sun Valley. About 900 (64 percent) of
these people are children under the age of 18. This is due to the fact that the public
housing is so competitive that one needs to be a single parent to move in. As a result,
most households (over 65 percent) are single-mother homes. Meanwhile, as Portes notes,
“Social capital is greater in two-parent families, those with fewer children, and those
where the parents have high aspirations for their young.”59
This has also been
documented in several other studies.60
59
Portes 1998: 11
60
See, for example, McLanahan and Sandefur 1994; Hao 1994

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48
In the year 2000, the median income for the neighborhood was $7,401. This
decreased from over $8,500 in 1990.61
Since 1990, the poverty rate has increased from
67 percent to 72 percent. Over the same time period, it increased from 73 percent to 79
percent for children. The community has been predominantly Hispanic for a number of
years, although over the past ten years, the Black and Asian populations have both more
than doubled their percentage share.62
Also, it has had the highest crime rate in the city
of Denver for the past two years. Child abuse, larceny, and property crime continue to be
the top reported crimes in Sun Valley, and gang activity has been on the increase. The
child neglect rate is almost eight times higher than the Denver average.63
Despite all of
the kids in the area, only five high school students from the Sun Valley neighborhood
have graduated in the past five years.64
Even the teachers have a hard time staying at
school; the faculty turnover rate at Fairview Elementary is fifty percent per year.65
Historically, Sun Valley has always been a relatively poor neighborhood. One
contributing factor is its relative geographic isolation from other neighborhoods. Quite
literally, Sun Valley is enclosed by natural and man-made boundaries. To the north is
Mile High Stadium, its vast parking lots, and a few warehouses; to the east is the Platte
River and I-25; to the south is Highway 6; to the West is Federal Boulevard, with its
many public buildings virtually hiding the community from passing traffic.
Before Mile High Stadium was built, there were many homes in the north region
of Sun Valley. Unfortunately, all but two blocks of owner-occupied homes got torn
down in favor of parking lots. For most of the year, these lots remain completely vacant.
61
Hubbard 2002: 6A
62
Ibid.
63
The Colorado Foundation for Families and Children 2000
64
From an interview with Pastor “Anton” of Sun Valley Community Church, Summer 2001

Chapter 4
49
One serves as extra parking for off-duty school buses and semi trailers. When these
homes were wiped out, much of the stability of the community was taken out with them.
Sun Valley was historically a industry-intensive area; in fact, over 85 percent of it
is zoned industrial.66
Its close vicinity to the Platte River, and its accessibility by railroad
and major roadways promote this. An oil-burning power plant is located on the east side
of the community.
A study of Sun Valley conducted by the Colorado Foundation for Families and
Children in 2000 found that time and time again, residents named safety, especially for
their children, as the number one issue in the community. Instead of reporting gang and
drug activity to authorities, however, residents keep quiet. This happens because
residents do not want to put themselves or their children in danger. The result, the study
states, is that, “Residents… choose to ‘mind their own business’ and live in ever
increasing isolation. While residents acknowledge that increased policing and
neighborhood watch programs have improved the situation, they feel more can be
done.”67
The environment is also a concern. The Platte River is filthy from years of
dumping, and it has not been recovered, yet children are often found playing there amidst
piles of trash. In addition, there are abandoned vehicles and buildings in the
neighborhood (one such building is right across from the elementary school). The school
is infested with cockroaches (I know, I saw them while walking around the neighborhood
65
Ibid.
66
The Colorado Foundation for Families and Children 2000
67
Ibid.

Chapter 4
50
one evening). In the project area, dumpsters are located along city streets. Among mid-
summer heat, the stench becomes nearly intolerable.
Another pressing issue is the lack of middle-class housing. Much of Sun Valley
lies on the Platte floodplain; as such it is not suitable for residential housing. Indeed,
even the projects are in an area that has been zoned for industrial use. This makes it
incredibly difficult for residents to quality for home loans and improvement permits.
Because of the middle-class housing shortage in the area, if residents are able to rise up
out of the projects, they must leave the neighborhood, and in most cases, this means
leaving their family. This is a huge dilemma for many of the residents who value their
family. For these people, the costs of leaving greatly outweigh the costs of staying in the
project housing. There is an ongoing effort within the community to pass legislation that
would allow for more middle-class housing, but it is coming under a lot of fire.
This could actually be a very real negative effect of social capital on the well
being of an individual, as referenced earlier (see chapter three) in the work of William
Julius Wilson (Wilson 1996:63). This is because in this case, social integration is often
great enough between family members to influence a decision not to leave the
community when it otherwise would be the best decision for the individual. Social
control can keep individuals from pursuing “positive social outcomes.” Of course,
residents could theoretically improve their economic situation while maintaining their
familial ties if there was more middle-income housing in the area. The housing might
also further motivate residents by serving as a visible, tangible example of what is
possible after their tenure in the projects.

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51
There are positive and negative effects of studying Sun Valley, specifically. The
positive effects, as stated above, are inherent in the socioeconomic makeup of the
population. The fact that Sun Valley is a poor community should make the effects of
social capital more pronounced, as discussed in chapter three.
In addition, I have spent a considerable amount of time in the Sun Valley
neighborhood, and I am well acquainted with many individuals within the community.
For the last two summers I have volunteered at Sun Valley Community Church, the only
church in the locality. I have had countless conversations during barbecues and retreats
with many of the residents. In addition, I spent the 2001-2002 school year as a tutor at
the Sun Valley Youth Center. As a result of my own investment in the community, a
high degree of trust has developed, which is crucial to getting honest answers from the
respondents selected for this study.
There are also negative effects of studying this population. The neighborhood
consists primarily of public housing, so there is a great deal of transience. Individuals
within the housing project are moving quite frequently, and, as the residents themselves
have addressed, the frequency of these moves is increasing. Such movement makes it
hard to do any sort of longitudinal study on the population. In addition, on more than one
occasion respondents moved and their telephone numbers were disconnected before I
could contact them to set up an interview.
On the Sample
Sample data was collected between November 2002 and February 2003. Subjects
were selected based on the researcher’s previous relationships and word-of-mouth

Chapter 4
52
through those relationships. Therefore, this sample in no way reflects a random sampling
of the Sun Valley neighborhood. However, the sample does provide valuable insights
into the way any poor person might go about their daily life in search of increased well
being. In addition, because of the researcher’s relationships with these subjects, the
overall trust level of respondents was higher than it would have been had the researcher
randomly selected subjects from the neighborhood. In this community, as in many poor
communities across the United States, residents are especially leery of unknown white
males asking for an hour of their time (and sometimes, rightly so).
In total, the researcher interviewed ten community members. Respondents were
between the ages of 18 and 65, and included current Sun Valley residents, previous Sun
Valley residents, and ancillary interviews with those who work in Sun Valley, especially
those in community development and community organizing positions.
Quite a few of those who were interviewed have been living in Sun Valley for ten
years or more. There are many who are self-proclaimed “experts” on the history of Sun
Valley, and three of the subjects have been living in Sun Valley for over 38 years.
Subjects were very eager to share not only about their own personal lives, but also of the
neighborhood’s past and present. In a sense, I was given a grand narrative of the recent
(last 30 years or so) history of the community.
I made a conscious attempt to get an equal amount of interviews with both
homeowners and non-homeowners in the neighborhood. This meant that the sample
collected was weighed towards homeownership because there are currently less than two-
dozen homes in the 1500-person locality. Homeownership is an important measure of

Chapter 4
53
capital stock (it makes up 2/3 of the wealth for the bottom 4/5 of all American homes68
),
and because one of the crucial aspects of this study is economic well being, it is fitting to
get a wide range of the types of households from which data can be drawn.
The sample was very mixed ethnically, from Chilean to American Indian to
Vietnamese to Italian to Mexican. All of the homeowners interviewed are married,
whereas all but one of the non-homeowners are not (and it is because he is living there
illegally).
The biggest downside of the sample is its size. As stated, I only interviewed ten
people in the Sun Valley community. Many of these people are not, in fact, in extreme
poverty situations. Instead, they are living in homes and they are in semi-stable
economic conditions. This negatively affects the range of my sample. Were I to do this
study again, I would interview more people living in public housing within the Sun
Valley neighborhood. A larger sample would have given me a broader base from which
to analyze the mechanisms of social capital within Sun Valley. Despite the small size of
the sample, the details can be generalized to recognize patterns of social capital usage.
Another downside of the sample is that many of the individuals are associated
with the Sun Valley Community Church. This is because of my work there over the past
two summers. As a result, most of the respondents can be seen as possessing some form
of social capital already, in that they are affiliated with the church. This means that there
is a lower bound of people that I am not reaching, simply because I do not know about
them. In short, I used my own social capital resources to invite people to be interviewed;
therefore, I missed those without any endowments of social capital.
68
Jeffrey Zax lecture, September 23, 2002

Chapter 4
54
On the Interview Process and the Interview Guide
Interviews occurred face-to-face, with the researcher hand-recording the
respondent’s responses. Most often, the interviews were conducted at Sun Valley
Community Church or in the subject’s home. This ensured that the respondents were as
comfortable as possible while the interviews took place. An interview guide was
consulted to aid the interview process.
The interview guide consists of five sections. The sections are aimed at gaining
access to the respondent’s background information, information regarding social capital,
and as much ancillary information as possible. However, considerable time was given to
respondents to elaborate on their personal stories. I then asked follow-up questions
spontaneously based on the responses that were given and the stories that were detailed.
Often, the interview guide was consulted less and less as the interview process progressed
and conversation became more relaxed. Regardless of whether or not it was consulted,
roughly the same sets of questions were asked in each interview. Ultimately, the same
information was always gathered.
The first section of the guide was dedicated to getting an understanding of the
respondent’s background information. This included questions on the person’s
movement to the community and his or her relationships there. In part, this was done to
make the respondent comfortable with me (if we did not already have a relationship), and
also to get key basic insights in the person’s life that would aid in asking relevant
questions later on in the interview.
The second section was dedicated to the respondent’s family life, since it has been
found that the family has a profound influence on an individual’s social capital resources.

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55
Questions were directed at finding information regarding the respondent’s upbringing and
the resources available to them as children (including whether or not their parents had
automobiles and steady jobs or owned homes), time spent with family (both nuclear and
extended), current relationships with family, marital status, and relationships with their
children. Questions were also asked about the extent of reciprocity and information
flows between family members.
The next section was dedicated to the respondent’s personal situation.
Information was gathered such as formal employment (wage rates and how he or she
attained their current job), contentment with work, overall happiness, healthiness, other
forms of income, and how he or she spends recreational time.
The goal of the fourth section was to find out about the respondent’s social capital
portfolio. Questions regarding friendships, neighborhood associations, organizational
involvements, and tendency to give or receive help were asked here. This gave me an
idea of all of the aspects of social capital as discussed in chapter four, including trust,
range, endowment, use, and sources of social capital.
The final section was dedicated to emergency and crisis situations. Respondents
were asked what they would do or who they would go to when given sudden hypothetical
situations such as a need for money or a family illness. Respondents were then asked if
they had ever been givers or helpers to someone in such need. Finally, respondents were
encouraged to put forth any additional information they could think of related to the
topics discussed.
Interviews ranged from an hour to two hours each. As the interview process
progressed, I asked more and more questions about the subject’s involvement in the Sun

Chapter 4
56
Valley Coalition, as it became apparent that participation in that organization had a
profound influence on the overall connectedness of a respondent.

Chapter 5
Results: Interview Data
Qualitative Findings
This section concentrates on the individuals interviewed. Each individual’s story
is taken to convey in detail the extent of one’s endowment and use of social capital over
one’s lifetime. Of the ten people interviewed, there was a dichotomy, as will become
clear, of people with small and large amounts (in both endowment and use) of social
capital. The “small” group consists of three respondents, and the “large” group consists
of seven respondents.
This distinction is not foolproof, and does have some drawbacks. Chiefly, it is
hard to accurately weigh different sources of social capital on an individual basis. For
example, below, it is noted that Anton does not have any people besides his wife that he
considers “friends.” In addition, he has no family members whom he sees on a regular
basis. He often feels alone in his position as the pastor of Sun Valley Community

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58
Church. However, he does know a great many people, both in his own community and
outside of it, whom he considers to be acquaintances. This contributes to an
extraordinary range of social capital, because he has acquaintances from all socio-
economic, racial, cultural, professional, and educational backgrounds.
One can see from this example the two sometimes-conflicting aspects of social
capital discussed previously in chapter 3 of this paper. The first is level of trust. An
increase in one individual’s level of trust with another individual will lead to more
intimate resource sharing, such as informal daycare, house-sitting, or even living
together. In this case, Anton has few people who he can trust on a very intimate level,
such as family and close friends.
On the other hand, though, there is the aspect of social capital we have called
range. In this sense, the more loosely connected an individual is with another, the better.
Because the two have separate, distinct associations with different members of the
community, it expands each individual’s range of social capital. Because Anton has a
veritable cornucopia of acquaintances, his social capital portfolio has remarkable range.
As a general result, he has access to more information, and he has more opportunities to
increase his individual well being.
It is hard to assess which aspect, trust or range, has greater affect on an
individual’s economic well being. It is of my opinion that it varies from person to
person. Some are more comfortable and can better use those social capital endowments
that are greater in trust, and some can better use those endowments that are greater in
range. I have used my own discretion to evaluate which was more influential to a given

Chapter 5
59
respondent in the data below. I further discuss the aspects of trust and range as they
relate to well being in chapter six.
Respondents with Small Amounts of Social Capital
Benny
Benny is a 48 year-old man who came from a family of 14. He moved to Sun
Valley when he was eight or nine years old. His dad was a miner and bought two homes
in Sun Valley. Benny dropped out of high school in the 10th
grade and joined a local
labor union.
He started work with the union at the Chatfield Dam. All three of his older
brothers were working there at the time, and one was made foreman because of his
extensive knowledge and skill. Benny’s brothers were the ones who managed to get him
a job there. At the time, he had no experience doing hard manual labor, and he
comments, “I found everything out from my brothers.”
Because of his expertise, his brother would often get asked to do a number of the
more important jobs with the union. In 1972 (the same year Benny was married), his
brother was asked to take a job at Coors, and he made it possible for Benny to come
along. This ended up being Benny’s life work, and it paid well. He made an average of
$45,000 a year hauling beer crates.
After Benny’s parents died about ten years ago, one of the family’s houses was
owned by one of his sisters, and the other house was owned by one of his brothers.
Unfortunately, the brother got involved in crime, and his house had to be sold or
foreclosed. At that time, Benny did not know how to keep the house in the family’s

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60
name, and according to him, there was no one in the community to educate him. No one
would help him fight for the house, and eventually, they lost it. Down the road, however,
another one of his brothers ended up owning a different home on the same block, and it is
in that house that Benny now lives. He pays rent to this brother, who lives next door.
Benny is bitter about the fact that no one was willing to help him save the other house.
Benny worked at Coors for 25 years until he blew out two discs in his back while
loading beer on the job. He was awarded a lump-sum payment of $100,000 and a
pension of $18,000 a year. With the money, he paid for a trip for his whole family to go
to Disney World. He thought he would be able to go back to work, but it turned out that
the injury was worse than he expected, and he has not gone back. Benny has been out of
work for six years now.
Because of his inability to save his family’s house, Benny embraced the work of
the pastor and others as they initiated the Sun Valley Coalition in 1997. He states,
“When you build relationships, you’re not afraid of being accepted.” However, because
of his injury, he does not venture outside of his home very often anymore. In addition, he
says there is a lot of miscommunication that goes on in the group, and he states it is
difficult because many of the members are Vietnamese and do not speak English. As a
result, he really does not feel like he is a part of the group. He notes that a lot of things
go on at the church, but most of the community knows nothing about it. It seems to him
that the homeowners are in a select group, and more outreach needs to occur.
Benny has felt like many groups (neighborhood groups, NGOs, government
outreach programs, etc.) who come into Sun Valley have promised a lot, but not held
onto those promises. One such example is the new city buildings that have been built

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61
right in Sun Valley, especially the Denver Health and Human Services building. Over
400 entry-level jobs were created for the area when the building went up, but no one from
the community was able to get a job there, including Benny. Instead of trying to be a part
of the broader community, Benny lost hope in branching out. He states, “My family is
the most important thing in the world to me now.”
Benny has used the social capital resources available to him pretty well in the
past, especially in the job market. However, he has not used resource endowments in the
past years (since his injury), as he has kept to himself and stayed home. As a result, he
feels disconnected.
Danielle
Danielle moved to the projects in Sun Valley when she was four years old; her
grandfather got a public housing apartment for the elderly, and she and her mother moved
in with him. She is a 33 year-old, soft-spoken single mother of a 17year-old son, and she
works at the Sun Valley Youth Center.
Danielle says that her teen life is best characterized as hanging out with friends,
ditching class, and smoking weed. Her mother got her own unit in the projects shortly
after moving there, and Danielle “…made [her] mom let [her] go” at the age of 17. She
likes to be alone, she says, and she was happy being by herself. She ended up dropping
out of 11th
grade and started to clean apartments and do janitorial work. In addition, she
did a lot of babysitting over the course of her teen years and into her twenties. She got on
welfare and got a place of her own in the projects for her and her son.
The neighborhood was a lot less violent then, according to Danielle. There were,

Chapter 5
62
“…no gangs, and now there’s more shootings and stabbings than there used to
be. The community was more solid before, but now people are moving in and
out a lot faster and there’s a lot of new teens with nothing else to do…. People
know too much around here, so I don’t socialize much. I like to be by myself.”
Inherent in this statement is a lack of trust of her neighbors. She states, “A lot of my
neighbors drink. I’m not much into that anymore, so I don’t associate with them. A few
I trust – the older ones that have been around for many years – but some I don’t trust at
all.” She considers a few of her neighbors to be “associates,” but none to be friends.
Currently, Danielle lives with her mother, her son, and her two younger cousins.
None of Danielle’s other family members live in Colorado – the rest of the family lives in
Arizona. For a few months in 2002, her mother left with her cousins (she has legal
custody) for Arizona, to be with the rest of the family. Danielle stayed back because she
“…wanted to make it on her own.” Unfortunately, her mother lost her unit in the projects
she when left for Arizona. When she came back, Danielle sacrificed her independent
spirit and let her mother and cousins stay with her.
Danielle started working at the youth center in 1999 because her mother made her
aware of it. Her mom used to clean the Sun Valley Community Church – the church that
housed the youth center – and through that job, heard about the position helping out with
the kids. Danielle started volunteering alongside her mother, and after about a year,
Danielle got a paid position for her work supervising, tutoring, and playing with the kids
there.
In 2001, Danielle got her GED, with the help of a woman who worked at the local
elementary school. Danielle heard about the woman through a friend, and decided to
give her a call. As a result of her diploma, Danielle got a raise at her job and currently
earns $8.50 an hour as a three-quarter time childcare assistant. She is also aspiring to go

Chapter 5
63
to college to earn a certificate or a degree towards counseling troubled kids and teens.
However, she states, “It’s too bad you need to be certified. Some things you shouldn’t
need school to get paid for.” She needs financial help for her schooling, and does not
know where to get it. She also remarks that if she had someone to go with her to college,
she wouldn’t be as scared. This fear extends to other areas as well, such as getting her
driver’s license, purchasing a vehicle, going to the doctor, and even attending the Sun
Valley Coalition meetings. She says, “Nobody has personally invited me, and it makes
me nervous to go.” She even asked me, “Does it really help?”
Danielle wants more for her son. His father is currently in prison and although he
and Danielle never married, she “…needs him financially and emotionally.” They are
still really close, and Danielle is currently trying to get him into a halfway house, but so
far there has been no success. It is difficult for Danielle because she knows there are
conversations she would like to have her son that would be much easier if his father were
around.
In short, Danielle is not satisfied with her life. She always wants more, but does
not know how or from where to get it, and her fear sets her back. She is not very happy
with the way things are going in her life and knows she “could be doing better.”
Danielle is not very well endowed with social capital resources. Her mother is
her only close relative and the father of her son is in prison. She is lonely and has stated
that she wants others to join with her in what she wants to accomplish, although she
affirms her own independence. It is obvious that a few friends with similar passions
could help Danielle out a great deal.

Chapter 5
64
Nina
Nina is a 57 year-old, warm-hearted, Spanish-American grandmother who lives in
Decatur Place apartments, a complex right across the street from the church. She lives
with her granddaughter, although occasionally, as was the case when I interviewed her,
her daughter stays with her. She has custody of her granddaughter because she “…has a
daughter that’s not responsible.”
Nina grew up in Commerce City. Her father was a truck driver who died in 1973.
Her mother remarried but she “…has never gotten along with her new husband.” She has
four brothers and three sisters and her family was really close growing up. One of her
brothers is a mechanic that Nina goes to whenever she has car trouble, and he gives her a
discounted rate.
Nina was married twice, and widowed both times, once in 1988 and again in
1992. She moved to Sun Valley a little over two years ago to help clear up her credit.
She is enrolled in a certificate program, and shortly she will be eligible to buy a small
home. Her main regret in life is not buying a home sooner, because she says she
probably would have it paid off by now.
Nina went to medical assistant school and graduated in 1985. She managed a
Pizza Hut after that until she shattered her knee on the job in 1990. She could not work
again until 1996, after she filed a lawsuit and won; however, she has never regained the
strength and movement in her knee. At that time, she went back to school at a local
community college to learn how to use computers because she “…wanted to get a
career.” However, she ended up getting carpal tunnel and dropping out. Nina now works

Chapter 5
65
for Professional Home Healthcare as a certified nursing assistant. She has a few clients
and works part time to pay the bills. She has an annual income of around $24,000.
As far as friendships go, Nina does not have many. She states, “I don’t have
many friends. All my friends are dead…. I don’t hang out with anybody here in this
building; they all drink and are loud. I usually just go over to my niece’s or my
brother’s.”
In January 2002, Nina’s son passed away. Her brothers helped her with
arrangements for the mortuary and the $2500 it cost for the funeral. Despite this help,
she does not get much help caring for her granddaughter. Because there is “no one else
that’s reliable” and “no one else available” to care for her granddaughter, Nina says she
was not able to get a bus driver job that she wanted. Her granddaughter is supposed to be
in kindergarten this year, but since she cannot afford to have her in daycare after school,
she stays with Nina during her house calls throughout the day. Her granddaughter sees a
speech therapist but does not receive any schooling.
Nina does attend church functions. She goes to the service on Sundays and
participates in a Bible study on Wednesdays. She is very grateful and says, “Church
helps a lot when I’m feeling depressed.” Other than that, however, she does not get out
very often. Most of her time is spent caring for her clients and her granddaughter.
Nina states, “I’m very disappointed with how [life] has turned out.” She puts the
weight of her discontentment on “…waiting for so long” to try to purchase a home of her
own.
It is easy to ascertain from Nina’s comments that her social capital endowments
are negligible. She has almost no friends and she could use a lot more help. The people

Chapter 5
66
that she was closest to have all passed away, and she is frightened by the violence she
hears from her neighbors in her apartment complex.
Data Synthesis – Respondents with Small Amounts of Social Capital
Benny, Danielle, and Nina are all dissatisfied with life. All three of them gave
“what if” scenarios during the interview process, addressing that life could have been
better had the right opportunities arisen. All three seem in some way disconnected from
and discontented with their immediate social sphere – Benny is frustrated at the lack of
help organizations have brought him, Danielle says people are not trustworthy these days,
and Nina doesn’t “…understand this generation.” They are all lonely to some extent and
all three gave a sense that they were just going through the motions of life. In a sense,
dependence on others has hurt them in some way or another in the past – Benny
depended on the organizations that “didn’t follow through with promises”, Danielle had
some dependence on her son’s father who is now in prison, and Nina has depended on
many people that have passed away. Out of these losses, they have lost hope in the value
of relationships with others.
These three respondents do not like living in the area. They cited high crime,
alcoholism, and domestic violence, among other things. Nina notes, “It’s really hard to
get used to the violence. Often they have young kids, and they’re shouting and
screaming, and I have to call the police.” For these respondents, the only people they
know in the neighborhood are those who live in their immediate vicinity (on their block).
Danielle comments, “I don’t know a lot of the people around where I live. A few I trust –
the old ones, the ones that have been here many years. But my neighbors are my

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