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The Dynamics of Subcenter Formation: Midtown Manhattan, 1861-1906


  • Jason Barr


  • Troy Tassier



Midtown Manhattan is the largest business district in the country. Yet only a few miles to the south is another district centered at Wall Street. This paper aims to understand when and why midtown emerged. We have created a new data set from historical New York City directories that provide the employment location, residence and job for several thousand residents in the late 19th and early 20th centuries. We supplement this with data from historical business directories. The data allow us to describe how, when and why midtown emerged as a center of commerce. We find that midtown arose because of economies of scale related to shopping, rather than congestion in lower Manhattan or wage differentials across the city. Specifically, the evidence suggests that firms moved to midtown to be near retail businesses and other commercial activity in order to be closer to customers, who had been moving north on the island throughout the 19th century. Once several industries moved from lower Manhattan it triggered a spatial equilibrium readjustment in the 1880s, which then promoted the rise of skyscrapers in midtown around the turn of the 20th century, several years before the opening of Grand Central Station in 1913.

Suggested Citation

  • Jason Barr & Troy Tassier, 2014. "The Dynamics of Subcenter Formation: Midtown Manhattan, 1861-1906," Working Papers Rutgers University, Newark 2014-002, Department of Economics, Rutgers University, Newark.
  • Handle: RePEc:run:wpaper:2014-002

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    References listed on IDEAS

    1. Alex Anas & Richard Arnott & Kenneth A. Small, 1998. "Urban Spatial Structure," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1426-1464, September.
    2. McMillen, Daniel P. & Singell, Larry Jr., 1992. "Work location, residence location, and the intraurban wage gradient," Journal of Urban Economics, Elsevier, vol. 32(2), pages 195-213, September.
    3. Gerke J. Hoogstra & Jouke van Dijk & Raymond J. G. M. Florax, 2017. "Do jobs follow people or people follow jobs? A meta-analysis of Carlino–Mills studies," Spatial Economic Analysis, Taylor & Francis Journals, vol. 12(4), pages 357-378, October.
    4. Henderson, Vernon & Mitra, Arindam, 1996. "The new urban landscape: Developers and edge cities," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 613-643, December.
    5. Anas, Alex & Kim, Ikki, 1996. "General Equilibrium Models of Polycentric Urban Land Use with Endogenous Congestion and Job Agglomeration," Journal of Urban Economics, Elsevier, vol. 40(2), pages 232-256, September.
    6. Jason Barr & Troy Tassier & Rossen Trendafilov, 2009. "Bedrock Depth and the Formation of the Manhattan Skyline, 1890-1915," Working Papers Rutgers University, Newark 2009-006, Department of Economics, Rutgers University, Newark.
    7. Donald R. Davis & David E. Weinstein, 2002. "Bones, Bombs, and Break Points: The Geography of Economic Activity," American Economic Review, American Economic Association, vol. 92(5), pages 1269-1289, December.
    8. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
    9. Timothy, Darren & Wheaton, William C., 2001. "Intra-Urban Wage Variation, Employment Location, and Commuting Times," Journal of Urban Economics, Elsevier, vol. 50(2), pages 338-366, September.
    10. White, Michelle J., 1988. "Location choice and commuting behavior in cities with decentralized employment," Journal of Urban Economics, Elsevier, vol. 24(2), pages 129-152, September.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. The Bedrock Myth and the Rise of Midtown Manhattan (Part I)
      by Jason Barr in Skynomics Blog on 2019-07-29 12:15:14
    2. The Bedrock Myth and the Rise of Midtown Manhattan (Part II)
      by Jason Barr in Skynomics Blog on 2019-08-06 12:31:54


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    Cited by:

    1. Gray, Rowena & Bowman, Rocco, 2020. "Locating the Manhattan housing market: GIS evidence for 1880-1910," QUCEH Working Paper Series 2020-01, Queen's University Belfast, Queen's University Centre for Economic History.

    More about this item


    Manhattan; spatial equilibrium; poly-centric urban development; urban spatial structure;

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
    • N91 - Economic History - - Regional and Urban History - - - U.S.; Canada: Pre-1913

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