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Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872

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  • Richard Hornbeck
  • Daniel Keniston

Abstract

Historical city growth, in the United States and worldwide, has required remarkable transformation of outdated durable buildings. Private land-use decisions may generate inefficiencies, however, due to externalities and various rigidities. This paper analyzes new plot-level data in the aftermath of the Great Boston Fire of 1872, estimating substantial economic gains from the created opportunity for widespread reconstruction. An important mechanism appears to be positive externalities from neighbors' reconstruction. Strikingly, gains from this opportunity for urban redevelopment were sufficiently large that increases in land values were comparable to the previous value of all buildings burned.

Suggested Citation

  • Richard Hornbeck & Daniel Keniston, 2014. "Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872," NBER Working Papers 20467, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20467
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    References listed on IDEAS

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    Cited by:

    1. Matthew Ranson & Lisa Tarquinio & Audrey Lew, 2016. "Modeling the Impact of Climate Change on Extreme Weather Losses," NCEE Working Paper Series 201602, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised May 2016.
    2. repec:anr:reveco:v:9:y:2017:p:21-58 is not listed on IDEAS
    3. repec:eee:regeco:v:64:y:2017:i:c:p:57-67 is not listed on IDEAS
    4. Adriana Kocornik-Mina & Thomas K.J. McDermott & Guy Michaels & Ferdinand Rauch, 2015. "Flooded cities," GRI Working Papers 221, Grantham Research Institute on Climate Change and the Environment.
    5. Kentaro Nakajima & Kensuke Teshima, 2018. "Identifying Neighborhood Effects among Firms: Evidence from Location Lotteries of the Tokyo Tsukiji Fish Market," 2018 Meeting Papers 575, Society for Economic Dynamics.
    6. Baruah, Neeraj & Dahlstrand-Rudin, Amanda & Michaels, Guy & Nigmatulina, Dzhamilya & Rauch, Ferdinand & Regan, Tanner, 2017. "Planning Ahead for Better Neighborhoods: Long Run Evidence from Tanzania," CEPR Discussion Papers 12319, C.E.P.R. Discussion Papers.
    7. Siodla, James, 2015. "Razing San Francisco: The 1906 disaster as a natural experiment in urban redevelopment," Journal of Urban Economics, Elsevier, vol. 89(C), pages 48-61.
    8. Stephen J. Redding & Esteban Rossi-Hansberg, 2017. "Quantitative Spatial Economics," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 21-58, September.
    9. Duranton, Gilles & Venables, Anthony J, 2018. "Place-Based Policies for Development," CEPR Discussion Papers 12889, C.E.P.R. Discussion Papers.
    10. Ioannides, Yannis M. & Zhang, Junfu, 2017. "Walled cities in late imperial China," Journal of Urban Economics, Elsevier, vol. 97(C), pages 71-88.
    11. repec:eee:regeco:v:73:y:2018:i:c:p:112-126 is not listed on IDEAS
    12. Du, Jun & Zhang, Junfu, 2018. "Walled Cities and Urban Density in China," IZA Discussion Papers 11951, Institute for the Study of Labor (IZA).
    13. Berger, Thor & Enflo, Kerstin, 2017. "Locomotives of local growth: The short- and long-term impact of railroads in Sweden," Journal of Urban Economics, Elsevier, vol. 98(C), pages 124-138.
    14. repec:eee:juecon:v:106:y:2018:i:c:p:81-100 is not listed on IDEAS
    15. Ager, Philipp & Hansen, Casper Worm & Lønstrup, Lars, 2018. "Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration," Discussion Papers of Business and Economics 2/2018, University of Southern Denmark, Department of Business and Economics.
    16. José García-Montalvo & Marta Reynal-Querol, 2018. "Earthquakes and Terrorism: The Long Lasting Effect of Seismic Shocks," Working Papers 1020, Barcelona Graduate School of Economics.
    17. José Garcia Montalvo & Marta Reynal-Querol, 2018. "Earthquakes and terrorism: the long lasting effect of seismic shocks," Economics Working Papers 1599, Department of Economics and Business, Universitat Pompeu Fabra.
    18. repec:eee:ecolet:v:168:y:2018:i:c:p:37-41 is not listed on IDEAS

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • N31 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: Pre-1913
    • N91 - Economic History - - Regional and Urban History - - - U.S.; Canada: Pre-1913
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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