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Skyscraper Height

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  • Jason Barr

Abstract

This paper investigates the determinants of skyscraper height. First a simple model is provided where potential developers desire not only profits but also social status. In equilibrium, height is a function of both the costs and benefits of construction and the heights of surrounding buildings. Using data from New York City, I empirically estimate skyscraper height over the 20th century. Via spatial regressions, I find evidence for height competition, which increases during boom times. In addition, I provide estimates of which buildings are economically “too tall” and by how many floors. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Jason Barr, 2012. "Skyscraper Height," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 723-753, October.
  • Handle: RePEc:kap:jrefec:v:45:y:2012:i:3:p:723-753
    DOI: 10.1007/s11146-010-9274-z
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    File URL: http://hdl.handle.net/10.1007/s11146-010-9274-z
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    References listed on IDEAS

    as
    1. 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, September.
    2. Kwong-Wing Chau & S.K. Wong & Y. Yau & A.K.C. Yeung, 2007. "Determining Optimal Building Height," Urban Studies, Urban Studies Journal Limited, vol. 44(3), pages 591-607, March.
    3. Bar-Ilan, Avner & Strange, William C, 1996. "Investment Lags," American Economic Review, American Economic Association, vol. 86(3), pages 610-622, June.
    4. Ed Hopkins & Tatiana Kornienko, 2004. "Running to Keep in the Same Place: Consumer Choice as a Game of Status," American Economic Review, American Economic Association, vol. 94(4), pages 1085-1107, September.
    5. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    6. Case, Karl E & Shiller, Robert J, 1989. "The Efficiency of the Market for Single-Family Homes," American Economic Review, American Economic Association, vol. 79(1), pages 125-137, March.
    7. Kerry D. Vandell & Jonathan S. Lane, 1989. "The Economics of Architecture and Urban Design: Some Preliminary Findings," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(2), pages 235-260, June.
    8. Helsley, Robert W. & Strange, William C., 2008. "A game-theoretic analysis of skyscrapers," Journal of Urban Economics, Elsevier, vol. 64(1), pages 49-64, July.
    9. John Doiron & James D. Shilling & C.F. Sirmans, 1992. "Do Market Rents Reflect the Value of Special Building Features? The Case of Office Atriums," Journal of Real Estate Research, American Real Estate Society, vol. 7(2), pages 147-156.
    10. Strange William C., 1995. "Information, Holdouts, and Land Assembly," Journal of Urban Economics, Elsevier, vol. 38(3), pages 317-332, November.
    11. Brueckner, Jan K. & Saavedra, Luz A., 2001. "Do Local Governments Engage in Strategic Property-Tax Competition?," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 203-230, June.
    12. Peter F. Colwell & M. Shahid Ebrahim, 1997. "A Note on the Optimal Design of an Office Building," Journal of Real Estate Research, American Real Estate Society, vol. 14(2), pages 169-174.
    13. Titman, Sheridan, 1985. "Urban Land Prices under Uncertainty," American Economic Review, American Economic Association, vol. 75(3), pages 505-514, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Manhattan Profits (Part I): The Economics of the Superslim
      by Jason Barr in Skynomics Blog on 2017-11-19 23:54:32
    2. The Economics of Skyscraper Height (Part I)
      by Jason Barr in Skynomics Blog on 2018-12-17 14:12:57
    3. The Economics of Skyscraper Height (Part IV): Construction Costs Around the World
      by Jason Barr in Skynomics Blog on 2019-06-04 12:26:40
    4. The Technology of Tall (Part III): Getting to the Core
      by Jason Barr in Skynomics Blog on 2019-10-23 12:27:08
    5. Skyscraper Bottlenecks (Part I): The Elevator
      by Jason Barr in Skynomics Blog on 2020-02-10 13:28:15
    6. Boon or Boondoggle? The Long Run Economics of the Empire State Building
      by Jason Barr in Skynomics Blog on 2020-08-17 12:28:49
    7. Why Doesn’t New York Construct the World’s Tallest Building Anymore?
      by Jason Barr in Skynomics Blog on 2020-12-23 13:17:41
    8. New Yimby City: A Roundtable Q&A with Open New York (Part II)
      by Jason Barr in Skynomics Blog on 2021-04-19 12:22:15

    Citations

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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, vol. 2014(3), 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. Jan K. Brueckner & Ruchi Singh, 2018. "Stringency of Land-Use Regulation: Building Heights in US Cities," CESifo Working Paper Series 6978, CESifo.
    4. Arvydas Jadevicius, 2016. "Skyscraper indicator and its application in the UK," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(2), pages 37-49.
    5. Nestor Garza & Colin Lizieri, 2012. "Skyscrapers and the economy," ERSA conference papers ersa12p414, European Regional Science Association.
    6. Barr, Jason & Cohen, Jeffrey P., 2014. "The floor area ratio gradient: New York City, 1890–2009," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 110-119.
    7. Koster, Hans R.A. & Rietveld, Piet & van Ommerren, Jos N., 2011. "Is the sky the limit? an analysis of high-rise office buildings," LSE Research Online Documents on Economics 58467, London School of Economics and Political Science, LSE Library.
    8. Prashant Das & Patrick Smith & Paul Gallimore, 2018. "Pricing Extreme Attributes in Commercial Real Estate: the Case of Hotel Transactions," The Journal of Real Estate Finance and Economics, Springer, vol. 57(2), pages 264-296, August.
    9. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2018. "The vertical city: Rent gradients, spatial structure, and agglomeration economies," Journal of Urban Economics, Elsevier, vol. 106(C), pages 101-122.
    10. Brueckner, Jan K. & Singh, Ruchi, 2020. "Stringency of land-use regulation: Building heights in US cities," Journal of Urban Economics, Elsevier, vol. 116(C).
    11. Barr, Jason & Smith, Fred H. & Kulkarni, Sayali J., 2018. "What's Manhattan worth? A land values index from 1950 to 2014," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 1-19.
    12. Jason Barr & Bruce Mizrach & Kusum Mundra, 2015. "Skyscraper height and the business cycle: separating myth from reality," Applied Economics, Taylor & Francis Journals, vol. 47(2), pages 148-160, January.

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    More about this item

    Keywords

    Skyscrapers; Building height; Status; New York City; D44; N62; R33;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • N62 - Economic History - - Manufacturing and Construction - - - U.S.; Canada: 1913-
    • 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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