Phantom of the Opera or Sex and the City Historical amenities as sources of exogenous variation》.pdfVIP

LABECO-01403; No of Pages 6 Labour Economics xxx (2015) xxx–xxx Contents lists available at ScienceDirect Labour Economics journal homepage: /locate/la beco “Phantom of the Opera” or “Sex and the City”? Historical amenities as sources of exogenous variation Thomas K. Bauer a,b,c, Philipp Breidenbach a,b,⁎, Christoph M. Schmidt a,b,c,d a RWI, Germany b RUB, Germany c IZA, Germany d CEPR, United Kingdom H I G H L I G H T S • 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 generate similar results which are not seriously causal. • Large cities and administrative centers eliminate opera effects in several estimation strategies. • The institutional importance of cities is a driving force of ongoing prosperity. a r t i c l e i n f o a b s t r a c t Article history: Using the location of baroque opera houses as a natural experiment, Falck et al. (2011) claim to document a pos- Received 18 September 2014 itive causal effect of the supply of cultural goods on the regional distribution of talents. This paper raises consid- Received in revised form 8 March 2015 erable doubts on the validity of the identification strategy underlying these estimates. While we are able to Accepted 19 May 2015 replicate the original results, we show that the same empirical strategy also assigns positive causal effects to Available online xxxx