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According to recent research, ethnoracial diversity negatively affects trust and social capital. This article challenges the current conception and measurement of “diversity” and invites scholars to rethink “social capital” in complex societies. It reproduces the analysis of Putnam and shows that the association between diversity and self-reported trust is a compositional artifact attributable to residential sorting: nonwhites report lower trust and are overrepresented in heterogeneous communities. The association between diversity and trust is better explained by differences between communities and their residents in terms of race/ethnicity, residential stability, and economic conditions; these classic indicators of inequality, not diversity, strongly and consistently predict self-reported trust. Diversity indexes also obscure the distinction between in-group and out-group contact. For whites, heterogeneity means more out-group neighbors; for nonwhites, heterogeneity means more in-group neighbors. Therefore, separate analyses were conducted by ethnoracial groups. Only for whites does living among out-group members—not in diverse communities per se—negatively predict trust
