Working Paper: CEPR ID: DP10098
Authors: Thomas Bauer; Philipp Breidenbach; Christoph M. Schmidt
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: historical amenities; human capital; regional competitiveness
JEL Codes: H42; J24; R11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Distance to baroque opera houses (N93) | Share of skilled workers (J24) |
| Distance to brothels (R39) | Share of skilled workers (J24) |
| Distance to breweries (L66) | Share of skilled workers (J24) |
| Distance to historical amenities (N93) | Share of skilled workers (J24) |
| Underlying local traits (D01) | Share of skilled workers (J24) |
| Historical characteristics (B15) | Share of skilled workers (J24) |