Summary of Music in the Air

Estimating the Social Return to Cultural Amenities

CESifo Group Munich ,

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Music in the Air summary
Music and the arts can bring innovation, economic growth and higher wages to cultural hubs.


7 Overall

6 Importance

8 Innovation

8 Style


In the past, infrastructure, capital and natural resources largely determined a locale’s economic potential. Today, with the waning importance of manufacturing and the ascendance of knowledge-based industries, cultural amenities are taking on a much greater role in attracting talent and building local economies. This data-driven paper from economists Oliver Falck, Michael Fritsch, Stephan Heblich and Anne Otto seeks to quantify the financial impact that a rich cultural scene has on a community and to determine the economic benefits of public investment in the arts. getAbstract recommends the rigorous analytics underlying this report’s thesis and methodology to economists and urban planners and believes that cultural mavens will find that its conclusions are music to their ears.

In this summary, you will learn

  • How cultural amenities attract highly skilled workers to a city or community, and
  • How their presence positively affects the local economy and population.


Economists are of two minds when it comes to the role of the arts and cultural amenities as factors in an economy: Demand-side theorists believe that subsidies and other measures primarily attract businesses into a community. Because “people follow jobs,” a cultural life then ensues. Supply-side thinkers...
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About the Authors

Oliver Falck is an economist at the Ifo Institute in Munich. Michael Fritsch is a professor at the University of Jena in Germany. Stephan Heblich is an associate professor at the University of Bristol in the UK. Anne Otto is a researcher at the IAB Rheinlander-Pfalz-Saarland in Germany.

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