Abstract :

The association between diversity and development { both negative and positive { has been empirically tested for a limited set of diversity variables despite its centrality to the political economy discourse. Using a unique census-scale micro dataset from rural India containing detailed caste, religion, language, and landholding data (n-13:25 million households) in combination with administrative data on human development, satellite measurements of luminosity as proxy for sub-national economic development, we show that an association between social heterogeneity and economic development is tenuous at best, and is likely an artifact of geographic, political, and ethnic units of analysis. We develop a cogent framework to jointly account for these `units of analysis' effects {in particular by introducing the MEUP or the Modiable Ethnic Unit Problem as the counterpart of MAUP (Modiable Areal Unit Problem) in spatial econometrics. We use seventeen dierent diversity metrics across multiple combinations of ethnic and geographic aggregations to empirically validate this framework, including the rst ever census-scale enumeration and coding of elementary Indian caste categories (jatis) since 1931.