The Economic Impact of the Arts

Abstract

It is especially important today to understand the true economic impact of the arts on our communities, as many are still trying to Recover from the last recession. This paper seeks to understand the effect the arts have on human capital and social capital, and detem1ines if the arts can successfully be used to attract the creative class and aid in the growth of other industries. Measuring the influence of the arts with data assembled using the North American Industry Classification System (NAICS), this work examines a cross sectional comparison of United States counties using fixed effects regressions to eliminate unobserved effects. We found significant evidence that the arts increase social capital, attract the creative class, and aid in the growth of other industries, but we failed to establish a relationship between the arts and human capital.