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Abstract There are two opposing perspectives regarding the impact of racial composition in a community on well-being: the homophily hypothesis suggests advantages of living within a homogenous in-group, while the diversity hypothesis proposes benefits of living in racially diverse communities. We examined how changes in relative racial composition within U.S. counties are associated with the life satisfaction of Asian, Black, Hispanic, Indigenous, White individuals (n = 2,023,217). Results based on compositional data analyses reveal that neither homophily nor diversity hypothesis provides a one-size-fits-all explanation for how racial composition shapes well-being. For instance, increased densities of Blacks are associated with increased life satisfaction among Blacks (supporting homophily), while increased densities of non-Asians are linked to increased life satisfaction among Asians (supporting diversity). Neither of the two hypotheses was supported among Whites. These findings underscore the importance of recognizing the varied effects that racial composition has on the lives of different racial groups.
Cheung et al. (2024) studied this question.