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The skyscraper revolution: global economic development and land savings

Author

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  • Ahlfeldt, Gabriel M.
  • Baum-Snow, Nathaniel
  • Jedwab, Remi

Abstract

Tall buildings are central to facilitating sustainable urbanization and growth in cities worldwide. We estimate average elasticities of city population and built area to aggregate city building heights of 0.12 and -0.17, respectively, indicating that the largest global cities in developing economies would be at least one-third smaller on average without their tall buildings. Land saved from urban development by post-1975 tall building construction is over 80% covered in vegetation. To isolate the effects of technology-induced reductions in the cost of height from correlated demand shocks, we use interactions between static demand factors and the geography of bedrock as instruments for observed 1975-2015 tall building construction in 12,877 cities worldwide, a triple difference identification strategy. Quantification using a canonical urban model suggests that the technology to build tall generates a potential global welfare gain of 4.8%, of which only about one-quarter has been realized. Estimated welfare gains from relaxing existing height constraints are 5.9%in the developed world and 3.1% in developing economies.

Suggested Citation

  • Ahlfeldt, Gabriel M. & Baum-Snow, Nathaniel & Jedwab, Remi, 2023. "The skyscraper revolution: global economic development and land savings," LSE Research Online Documents on Economics 121293, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:121293
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    File URL: http://eprints.lse.ac.uk/121293/
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    Cited by:

    1. Stephen J. Redding, 2024. "Quantitative Urban Economics," Working Papers 340, Princeton University, Department of Economics, Center for Economic Policy Studies..
    2. Henderson, J. Vernon & Thisse, Jacques-François, 2024. "Urban and spatial economics after 50 years," LSE Research Online Documents on Economics 125675, London School of Economics and Political Science, LSE Library.
    3. Harari, Mariaflavia & Wong, Maisy, 2024. "Colonial Legacy and Land Market Formality," MPRA Paper 121334, University Library of Munich, Germany.

    More about this item

    Keywords

    urban density; international buildings heights; skyscrapers; tall buildings; sustainable urbanization; city growth; commercial real estate; housing supply; urban sprawl; land savings; housing affordability; geographical constraints; environment;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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