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The Economics of Skyscrapers: A Synthesis

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  • Gabriel Ahlfeldt
  • Jason Barr

Abstract

This paper provides a synthesis of the state of knowledge on the economics of skyscrapers. First, we document how vertical urban growth has gained pace over the course of the 20th century. Second, we lay out a simple theoretical model of optimal building heights in a competitive market to rationalize this trend. Third, we provide estimates of a range of parameters that shape the urban height profile along with a summary of the related theoretical and empirical literature. Fourth, we discuss factors outside the competitive market framework that explain the rich variation in building height over short distances, such as durability of the structures, height competition, and building regulations. Fifth, we suggest priority areas for future research into the vertical dimension of cities.

Suggested Citation

  • Gabriel Ahlfeldt & Jason Barr, 2020. "The Economics of Skyscrapers: A Synthesis," CESifo Working Paper Series 8427, CESifo.
  • Handle: RePEc:ces:ceswps:_8427
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    Blog mentions

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    1. 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
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      by Jason Barr in Skynomics Blog on 2020-11-19 13:09:50
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    4. Skyscrapers and Housing Affordability: Debunking Misconceptions
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    Keywords

    density; economics; history; skyscraper; urban;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative

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