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From Samurai to Skyscrapers: How Historical Lot Fragmentation Shapes Tokyo

Author

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  • Yamasaki, Junichi
  • Nakajima, Kentaro
  • Teshima, Kensuke

Abstract

Can transaction costs in the urban land market generate lot size persistence and persistently hinder efficient land use? Using historical data in Tokyo, we study how initial lot fragmentation has affected urban development by exploiting the plausibly exogenous supply shock of large lots in 1868, the release of local lords’ estates (daimyo yashiki) scattered throughout old Tokyo, now the central business district. We construct a 100 m*100 m-cell-level dataset spanning 150 years. Using ordinary least squares and a regression discontinuity design, we find that cells previously used as local lords’ estates have larger lots today, implying that lot size persistence exists. We also find positive effects on land use and activities, that is, taller buildings, higher land prices, and higher firm productivity, implying lot size premia due to assembly frictions. We provide two pieces of evidence that these positive effects are explained by the growth of skyscrapers requiring large footprints. First, tall buildings explain the effect of local lords’ estates on firm productivity today. Second, we find no positive impact on land prices before the skyscraper age. Instead, it was negative, suggesting that split frictions were dominant at that time and assembly frictions became more relevant with the emergence of skyscrapers.

Suggested Citation

  • Yamasaki, Junichi & Nakajima, Kentaro & Teshima, Kensuke, 2021. "From Samurai to Skyscrapers: How Historical Lot Fragmentation Shapes Tokyo," TDB-CAREE Discussion Paper Series E-2020-02, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
  • Handle: RePEc:hit:tdbcdp:e-2020-02
    Note: First version: May 2020, This Version: Mar 2021
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/71546/070careeDP-E-2002.pdf
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    Cited by:

    1. Xu, Hangtian, 2020. "Land Price Fluctuations, Commercial-Residential Segregation, and Gentrification," MPRA Paper 98844, University Library of Munich, Germany.
    2. Atsushi Yamagishi & Yasuhiro Sato, 2022. "Measuring Discrimination in Spatial Equilibrium: 100 Years of Japan's Invisible Race," CIRJE F-Series CIRJE-F-1188, CIRJE, Faculty of Economics, University of Tokyo.

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    More about this item

    Keywords

    Transaction costs; Historical persistence; Skyscrapers; Lot fragmentation; Agglomeration economy;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

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