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Intordaetion: The differences in various geographical areas can no longer be explained by the differences in traditional inputs. There is growing evidence that social capital stands for the ability of producers to get benefit, by virtue of membership in social networks or other social structures in economic outcome (Portes, 1998 and Okunmadewa, et al. 2005 cited in Yusuf, 2008). Thus there is a need to complement human capital and physical infrastructure with social capital. In this study we analyzed correlation between social capital- based on the amount of membership in local organizations and participation in the management of these organizations indicators- and welfare of rural and nomadic producers in the Fars province. Method: A summarized model of household welfare regarding household and regional characteristics applied to estimate the role of social capital. In this model social capital beside physical and human capital were put in the per capita expenditure of households as an input. To gather data using stratified random sampling method-based on rangelands area, amount of production and the number of livestock related to rangelands- Abadeh, Darab, Shiraz, Firouzabad, Lar and Mamasani towns in Fars province were selected. In the next step using the random sampling method in different common rangeland units of the selected towns, 432 stakeholders were selected to fill the questionnaire. Findings: The results showed that the correlation between social capital and per capita expenditure was 3 times more than the correlation between human capital and per capita expenditure. Conclusion: Thus social capital plays a more important role in households' welfare compare to human capital. Also, in comparison of physical and human capital we notice that the effect of physical capital was more than human capital on households’ welfare.

Keywords: Fars, household welfare, Social capital

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