Social capital and household welfare in South Africa, 1993-98

The aim in this study is to determine the nature of the causal relationship , if any, between 'social capital: as measured by household membership in f ormal and informal groups and household welfare in South Africa. Using a re cently collected panel data set in South Africa's largest province, we esti mate per capita expenditure functions including measures of social capital, After-controlling for fixed effects and simultaneity, we find social capit al has no effect in 1993 but a positive and significant effect in 1998.