Despite unprecedented vertical growth in large cities, the economics of skyscrapers remain understudied. We combine data on tall buildings with a panel of land prices covering 140 years to analyze the determinants of urban heights. We provide estimates of the land price elasticity of height, the height elasticity of construction cost, and the elasticity of substitution between land and capital for tall buildings. The land price elasticity of height increased substantially over time, and it is larger for commercial than for residential buildings, which suggests that the supply side helps to produce the typical segregation of urban land uses.

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1 December 2018

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Review of Economics and Statistics 100(5) , pp.861-875, 2018

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DOI: 10.1162/rest_a_00734

This Journal article is published under the centre's Urban programme.

This publication comes under the following theme: What determines urban growth and urban decline and what should be the role of policy?