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This paper examines the effect of aggregate economic conditions in communities on individual levels of depression. While the effect of economic conditions on mental health has been examined at the aggregate level and at the individual level, models including both individual and aggregate processes are necessary to differentiate contextual from individual processes impacting mental health status. Both cross-sectional and panel data from a sample of respondents representative of a Great Plains state on which data were available in 1981,1986, and1989 were used in the analysis. The cross-sectional analysis in 1989 consisted of2,485 respondents. Panel data from 916 respondents in1981-1986 and from 1,299 respondents in 1986-1989 also analyzed In both the cross-sectional and panel data there was little evidence of an effect of living in economically distressed communities on mental health independent of the relationship to the individuals' economic conditions. The research found that while individuals were able to evaluate the state of the local economy with some degree of accuracy, and their perception of the local economy was related to depression, this effect was not strong enough to produce a significant relationship between aggregate economic measures and depression. Implications of these findings for understanding community climate effects in smaller communities is discussed.



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