A Measurement Issue Regarding the Link between a Region’s Creative Infrastructure and its Income

The creative capital possessed by the members of the creative class in region is either acquired through education or present innately in these members. Therefore, the creative infrastructure in the region is the sum of a part representing creative capital obtained through education and a second part denoting creative capital present innately in the creative class members. A researcher wishes to estimate the true relationship between the region’s log income per creative class member and its creative infrastructure . He has data on but not on . We study whether an ordinary least squares (OLS) regression of on a constant and will produce an unbiased estimate of the impact of on in two cases. In the first case, and are uncorrelated. In the second case, and are positively