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

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  • Bauer, Thomas K.

    (RWI)

  • Breidenbach, Philipp

    (RWI)

  • Schmidt, Christoph M.

    (RWI)

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.

Suggested Citation

  • Bauer, Thomas K. & Breidenbach, Philipp & Schmidt, Christoph M., 2014. "'Phantom of the Opera' or 'Sex and the City' ? Historical Amenities as Sources of Exogenous Variation," IZA Discussion Papers 8373, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8373
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    References listed on IDEAS

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    Cited by:

    1. Oliver Falck & Michael Fritsch & Stephan Heblich & Anne Otto, 2018. "Music in the air: estimating the social return to cultural amenities," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 365-391, August.
    2. Kiesel, Konstantin & Noth, Felix, 2016. "When Debt spells Sin: Does Religiosity guard against Over-Indebtedness?," Annual Conference 2016 (Augsburg): Demographic Change 145774, Verein für Socialpolitik / German Economic Association.
    3. Aristizábal, Juan & Tarapuez, Edwin & Hidalgo, Mario, 2023. "A multilevel approach to understanding the relationship between entrepreneurship and the urban environment: empirical evidence from Colombia [Un enfoque multinivel para comprender la relación entre," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 35(1), pages 311-329, June.
    4. Arntz, Melanie & Brüll, Eduard & Lipowski, Cäcilia, 2021. "Do preferences for urban amenities really differ by skill?," ZEW Discussion Papers 21-045, ZEW - Leibniz Centre for European Economic Research.
    5. Adolf K.Y. Ng & Zaili Yang & Stephen Cahoon & Paul T.W. Lee & Philipp Breidenbach & Timo Mitze, 2016. "The Long Shadow of Port Infrastructure in Germany: Cause or Consequence of Regional Economic Prosperity?," Growth and Change, Wiley Blackwell, vol. 47(3), pages 378-392, September.
    6. David B. Audretsch & Erik E. Lehmann & Nikolaus Seitz, 2021. "Amenities, subcultures, and entrepreneurship," Small Business Economics, Springer, vol. 56(2), pages 571-591, February.

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    More about this item

    Keywords

    historical amenities; regional competiveness; human capital;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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