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Friday, 5 June 2015

“Phantom of the Opera” or “Sex and the City”? Historical Amenities as Sources of Exogenous Variation Thomas K. Bauera, b, c, Philipp Breidenbacha, b, , , Christoph M. Schmidta, b, c, d Show more Choose an option to locate/access this article: Check if you have access through your login credentials or your institution Check access Purchase $35.95 doi:10.1016/j.labeco.2015.05.005 Get rights and content Highlights • The empirical analysis seriously doubts the causality claimed by Falck et al (2011) • German baroque operas cannot serve a quasi-natural experiment • Historical brothels and breweries serve similar results which are not seriously causal • Big and cities administrative vanish opera effects in several estimation strategies • The institutional importance of cities are a driving force of ongoing prosperity 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 the regional distribution of talents. This paper raises considerable doubts on the validity of the identification strategy underlying these estimates. While we are able to replicate the original results, we show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. The estimated effects are similar in size and significance to those of historical opera houses. We document that 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 Corresponding author at: RWI, Hohenzollernstr. 1cx-3, 45128 Essen, Germany. Copyright © 2015 Published by Elsevier B.V.

Labour Economics
Available online 28 May 2015
In Press, Accepted Manuscript — Note to users

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


doi:10.1016/j.labeco.2015.05.005
Get rights and content

Highlights

•
The empirical analysis seriously doubts the causality claimed by Falck et al (2011)
•
German baroque operas cannot serve a quasi-natural experiment
•
Historical brothels and breweries serve similar results which are not seriously causal
•
Big and cities administrative vanish opera effects in several estimation strategies
•
The institutional importance of cities are a driving force of ongoing prosperity

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 the regional distribution of talents. This paper raises considerable doubts on the validity of the identification strategy underlying these estimates. While we are able to replicate the original results, we show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. The estimated effects are similar in size and significance to those of historical opera houses. We document that 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


Corresponding author at: RWI, Hohenzollernstr. 1cx-3, 45128 Essen, Germany.
Copyright © 2015 Published by Elsevier B.V.
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