European Capitals of Culture and Life Satisfaction

University of Zurich, Department of Economics, Working Paper No. 117

47 Pages Posted: 26 Apr 2013

See all articles by Lasse Steiner

Lasse Steiner

University of Zurich

Bruno S. Frey

CREMA; University of Basel

Simone Hotz

University of Zurich

Date Written: April 1, 2013

Abstract

This paper analyzes whether hosting the most prestigious European cultural event, the European Capital of Culture, has an impact on regional economic development or the life satisfaction of the local population. Concerning the economic impact, we show that European Capitals are hosted in regions with above average GDP per capita, but do not causally affect the economic development in a significant way. Even a positive impact on GDP per capita would not imply a positive impact on individual utility or social welfare of the regional population. Surprisingly, using difference-in-difference estimations, a negative effect on the well-being of the regional population is found during the event. Since no effect is found before the event, reverse causality and positive anticipation can be ruled out. The negative effect during the event might result from dissatisfaction with the high levels of public expenditure, transport disruptions, general overcrowding or an increase in housing prices.

Keywords: Life Satisfaction, Mega-Events, Culture, European Capital of Culture

JEL Classification: H40, H54, R12, Z11, Z18

Suggested Citation

Steiner, Lasse and Frey, Bruno S. and Hotz, Simone, European Capitals of Culture and Life Satisfaction (April 1, 2013). University of Zurich, Department of Economics, Working Paper No. 117. Available at SSRN: https://ssrn.com/abstract=2251904 or http://dx.doi.org/10.2139/ssrn.2251904

Lasse Steiner (Contact Author)

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Bruno S. Frey

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

Simone Hotz

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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