ABSTRACT
This chapter describes and applies the theory of capital with social capital. It introduces the Social Capital and Health Hypothesis, explains the empirical exploration, and follows the steps of progress of econometrics to confirm the correlation studies and then by applying certain "crucial tests" to conclude that social capital is causal to improved health. Economic research on the health effects of social capital is quite new. Robert Putnam's empiricism found unmistakable signals of social capital benefits from the health data. He found that US states with higher St tended to have healthier children, lower murder rates, better education performance, more tolerance of other ethnicities, and better health status. There are at least four pathways for social capital to result in health gains: stress reduction, information, responsibilities, and social groups. Trust, which is found to be beneficial to health, is also found to be higher within the more ethnically homogeneous areas.
