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

23 Pages Posted: 15 Feb 2020

See all articles by Thomas K. Bauer

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Philipp Breidenbach

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen); Ruhr-Universität Bochum (RUB); Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)

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: human capital, historical amenities, regional competiveness

JEL Classification: R11, H42, J24

Suggested Citation

Bauer, Thomas K. and Breidenbach, Philipp and Schmidt, Christoph M., 'Phantom of the Opera' or 'Sex and the City'? Historical Amenities as Sources of Exogenous Variation. IZA Discussion Paper No. 8373, Available at SSRN: https://ssrn.com/abstract=2481562

Thomas K. Bauer (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
+49 201 8149 264 (Phone)
+49 201 8149 284 (Fax)

HOME PAGE: http://www.rwi-essen.de

University of Bochum - Faculty of Economics ( email )

Universitätsstraße 150
Gebäude GC, Ebene 3, Raum 58
D-44780 Bochum
Germany
+02 34 32 28341 (Phone)
+02 34 32 14273 (Fax)

HOME PAGE: http://www.ruhr-uni-bochum.de/empwifo/

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 38 94 529 (Phone)
+49 228 38 94 510 (Fax)

Philipp Breidenbach

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Christoph M. Schmidt

RWI - Leibniz-Insitut für Wirtschaftsforschung (RWI Essen) ( email )

Hohenzollernstraße 1-3
Essen, 45128
Germany
++49 201 8149-227 (Phone)
++49 201 8149-236 (Fax)

Ruhr-Universität Bochum (RUB)

GC 2/150
Universitätsstr. 150
D-44780 Bochum
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
17
Abstract Views
475
PlumX Metrics