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"Phantom of the Opera" or "Sex and the City"? Historical Amenities as Sources of Exogenous Variation

Thomas Bauer (), Philipp Breidenbach () and Christoph Schmidt

No 8373, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using the location of baroque opera houses as a natural experiment, Falck et al. (2011) claim to document a positive causal effect of the supply of cultural goods on today's regional distribution of talents. This paper raises serious doubts on the validity of the identification strategy underlying these estimates, though. While we are able to replicate the original results, we proceed to show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. These estimated effects are similar in size and significance to those of historical opera houses. We document that all these estimates reflect the importance of institutions for long-run economic growth, and that the effect of historical amenities on the contemporary local share of high skilled workers disappears upon controlling for regions' historical importance.

Keywords: regional competiveness; historical amenities; human capital (search for similar items in EconPapers)
JEL-codes: R11 H42 J24 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2014-08
New Economics Papers: this item is included in nep-cul, nep-his, nep-hrm and nep-ure
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Published in: Labour Economics 37 2015, 93-98

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Related works:
Journal Article: “Phantom of the Opera” or “Sex and the City”? Historical amenities as sources of exogenous variation (2015) Downloads
Working Paper: “Phantom of the Opera” or “Sex and the City”? Historical Amenities as Sources of Exogenous Variation (2014) Downloads
Working Paper: "Phantom of the Opera" or "Sex and the City"? – Historical Amenities as Sources of Exogenous Variation (2014) Downloads
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