Richard Florida: The Opera House Effect

Richard Florida is Senior Editor at The Atlantic and Director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management. He is a frequent speaker to communities, business and professional organizations, and founder of the Creative Class Group, whose current client list can be found here.

...A new study, "The Phantom of the Opera: Cultural Amenities, Human Capital, and Regional Economic Growth," published in the journal Labour Economics, sheds additional light on this conundrum by examining the effect the location of 17th and 18th century German opera houses has on attracting talent and spurring economic growth in later periods.  

During the Baroque era, the authors explain, "absolutistic courts and churches competed with each other for musical talent. … Thuringia alone, where the composer J.S. Bach grew up, contained 22 separate courts. Music was so highly regarded that 'every local court worth its salt had its own orchestra or band (Kapelle or Harmonie), and the more affluent courts maintained opera houses.'" They go on to point out that "the presence of one of these opera houses does not necessarily mean that the surrounding region was wealthy and prosperous enough to afford it; very often the rulers incurred vast debt and engaged in deficit spending in their quest for grandeur." The construction of these opera houses predates the rise of the well-paid, skilled workers and bourgeoisie who powered later economic growth. For these reasons, the location of these Baroque opera houses provides an intriguing "natural experiment" because they can be considered as "exogenous to the distribution of high human capital employees that originates from the period of and after the Industrial Revolution."...