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Skyscrapers and the Skyline: Manhattan, 1895-2004

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  • Jason Barr

Abstract

This article investigates the market for skyscrapers in Manhattan from 1895 to 2004. Clark and Kingston (1930) have argued that extreme height is a result of profit maximization, while Helsley and Strange (2008) posit that skyscraper height can be caused, in part, by strategic interaction among builders. I provide a model for the market for building height and the number of completions, which are functions of the market fundamentals and the desire of builders to stand out in the skyline. I test this model using time series data. I find that skyscraper completions and average heights over the 20th century are consistent with profit maximization; the desire to add extra height to stand out does not appear to be a systematic determinant of building height. Copyright (c) 2010 American Real Estate and Urban Economics Association.

Suggested Citation

  • Jason Barr, 2010. "Skyscrapers and the Skyline: Manhattan, 1895-2004," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 567-597.
  • Handle: RePEc:bla:reesec:v:38:y:2010:i:3:p:567-597
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    References listed on IDEAS

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    1. Grenadier, Steven R, 1995. "The Persistence of Real Estate Cycles," The Journal of Real Estate Finance and Economics, Springer, vol. 10(2), pages 95-119, March.
    2. Jim Clayton, 1996. "Rational Expectations, Market Fundamentals and Housing Price Volatility," Real Estate Economics, American Real Estate and Urban Economics Association, pages 441-470.
    3. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, pages 125-137.
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    6. Sheffrin,Steven M., 1996. "Rational Expectations," Cambridge Books, Cambridge University Press, number 9780521474009, December.
    7. Benson, Earl D & Hansen, Julia L. & Schwartz Jr., Arthur & Smersh, Greg T., 1998. "Pricing Residential Amenities: The Value of a View," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 55-73, January.
    8. Titman, Sheridan, 1985. "Urban Land Prices under Uncertainty," American Economic Review, American Economic Association, pages 505-514.
    9. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, pages 125-137.
    10. David Picken & Ben Ilozor, 2003. "Height and construction costs of buildings in Hong Kong," Construction Management and Economics, Taylor & Francis Journals, pages 107-111.
    11. Finn, Mary G., 1986. "Forecasting the exchange rate: A monetary or random walk phenomenon?," Journal of International Money and Finance, Elsevier, vol. 5(2), pages 181-193, June.
    12. Tony McGough & Sotiris Tsolacos, 1999. "Interactions within the Office Market Cycle in Great Britain," Journal of Real Estate Research, American Real Estate Society, vol. 18(1), pages 219-232.
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    Cited by:

    1. Valentina Antoniucci & Giuliano Marella, 2014. "Torri incompiute: i costi di produzione della rigenerazione urbana in contesti ad alta densità," SCIENZE REGIONALI, FrancoAngeli Editore, pages 117-124.
    2. Jason Barr, 2013. "Skyscrapers And Skylines: New York And Chicago, 1885–2007," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 369-391, August.
    3. Jason Barr, 2013. "Skyscrapers And Skylines: New York And Chicago, 1885–2007," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 369-391, August.
    4. Edward L. Glaeser, 2013. "A Nation of Gamblers: Real Estate Speculation and American History," American Economic Review, American Economic Association, pages 1-42.
    5. Hans R. A. Koster & Piet Rietveld & Jos N. van Ommerren, 2011. "Is the Sky the Limit? An Analysis of High-Rise Office Buildings," SERC Discussion Papers 0086, Spatial Economics Research Centre, LSE.
    6. Nestor Garza & Colin Lizieri, 2012. "Skyscrapers and the economy," ERSA conference papers ersa12p414, European Regional Science Association.
    7. Jason Barr, 2012. "Skyscraper Height," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 723-753, October.
    8. Gustavo S. Cortes & Marc D. Weidenmier, 2017. "Stock Volatility and the Great Depression," NBER Working Papers 23554, National Bureau of Economic Research, Inc.
    9. Tom Nicholas & Anna Scherbina, 2013. "Real Estate Prices During the Roaring Twenties and the Great Depression," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 41(2), pages 278-309, June.
    10. Edward L. Glaeser, 2013. "A Nation Of Gamblers: Real Estate Speculation And American History," NBER Working Papers 18825, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • N61 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: Pre-1913
    • N62 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: 1913-
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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