This paper examines the relationship between minority/majority status and psychological adjustment, as measured by the GHQ-12. Rather than using religious labels in Northern Ireland to define minority/majority status, the authors hypothesized that such status is more contingent upon the local area context. Using a purer operationalization of minority/majority status, the authors found no evidence of an `ethnic density effect'. Implications for the questionable validity of the `crucial test' of the selection and causation hypotheses are discussed. Copyright (C) 2002 John Wiley Sons, Ltd.