This paper analyzes how community heterogeneity influences resident decisions to undertake actions generating public benefits. The decision in question is completing and returning the 2000 Census questionnaire, an action which secures a significant amount of federal grants for the community. The model developed to explain this action allows members of societal groups to differentially value public benefits that accrue to other group members. Racial, generational, and socioeconomic class heterogeneity all predict significantly lower response rates at the county level. The potential for endogenous sorting into heterogeneous counties implies that the magnitude of true behavioral effects exceeds these estimates.

Studies attempting to link locational attributes and individual outcomes often focus on children or young adults, under the presumption that their location was exogenously determined by their parents. This strategy is more difficult to justify if parents migrate selectively and tend to transmit their own characteristics to their children. This paper uses Census microdata to document a strong link between selective migration in one generation and economic outcomes in the next. I show that selective migration is a possible explanation for a puzzle in the existing literature: the changing relationship between segregation levels and individual outcomes within the black population.