Culture-based development in the USA: culture as a factor for economic welfare and social well-being at a county level

Abstract

This paper explores the link between culture and regional development in USA counties by explicitly including an arts variable in an attitudes-driven culture-based development (CBD) production function. The main aims of the research are (1) to revisit the standard CBD model in order to examine whether its findings from the European Union context hold also for the United States and (2) to expand the CBD standard inquiry of local development beyond economic welfare. In relation to the latter, we address in particular (1) the effect of local cultural industries on migration (as a continuation of Florida’s hypothesis) and (2) the effect of culture on social well-being (alternatively measured by means of level of happiness and level of crime in terms of property theft). Our paper is, therefore, a novel contribution, providing a better understanding of the link between arts, culture and regional development and also facilitating an innovative evaluation of cultural impact relevant in the developmental debate in an extended socio-economic sense. The data used in this inquiry comprise a composite dataset, a cross section for the year 2000 at the county level combining census data with the cultural vitality index from the Western States Arts Federation and happiness variables from the general social survey panel for 2006. A three-stage least squares exploration of recursive types of a standard CBD and an extended CBD model leads to three main results: (1) the existence of a CBD cultural effect on local development is confirmed for the USA; (2) endogenous cultural industries have an effect on the mobility of human capital, and (3) the impact of cultural effects seems to be more significant when a negative Myrdalian vicious cycle is assumed.