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It is hypothesized that collective efficacy, defined as social cohesion among neighbors combined with their willingness to intervene on behalf of the common good, is linked to reduced violence. This hypothesis was tested on a 1995 survey of 8782 residents of 343 neighborhoods in Chicago, Illinois. Multilevel analyses showed that a measure of collective efficacy yields a high between-neighborhood reliability and is negatively associated with variations in violence, when individual-level characteristics, measurement error, and prior violence are controlled. Associations of concentrated disadvantage and residential instability with violence are largely mediated by collective efficacy.