IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa12p414.html
   My bibliography  Save this paper

Skyscrapers and the economy

Author

Listed:
  • Nestor Garza
  • Colin Lizieri

Abstract

SKYSCRAPERS AND THE ECONOMY Urban literature and particularly urban economics, does not deal frequently with skyscrapers, despite their ominous visual presence in cities skyline. The traditional urban economics model considers the heights of buildings to increase with the size (demographic and economic) of the cities, and the resulting land rent growth, while geographical extension diminishes these heights. This general prediction has been criticized by its inadequacy to deal with what it looks like an extreme height when skyscrapers are compared to the rest of the built structures, plus a certain lack of organic articulation into the urban fabric. As a complement to traditional theory, game theory interpretation makes use of an “all pay auction†structure, to predict above optimal height for the tallest building in a city at each moment of time; Austrian business cycle theory states that the tallest project building announcement coincides with business and liquidity peak, a predictor of the downturn. Following literature criticisms both theoretical and empirical, this article adds an explicit time dimension, in order to control a panel testing framework for the three of these theories, as long as the first two are static-comparative ones, while the third is concentrated on the economic cycle rather than the long-term trend. Latin American skyscrapers information about 23 cities located at 8 countries during the period 1990-2010 is used in the panel testing framework. The possibility of making a simultaneous test of the three theories is discussed, and it is detected that for the Latin American case, traditional theory seems to offer the best adjustment, while game theory and business cycle does not seem to be clear determinants of skyscrapers height. Keywords: Latin America, Cities, Urban Economics, Built Environment JEL Classification: R14, C70, L00

Suggested Citation

  • Nestor Garza & Colin Lizieri, 2012. "Skyscrapers and the economy," ERSA conference papers ersa12p414, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa12p414
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa12/e120821aFinal00416.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jason Barr, 2010. "Skyscrapers and the Skyline: Manhattan, 1895–2004," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 567-597, September.
    2. Helsley, Robert W. & Strange, William C., 2008. "A game-theoretic analysis of skyscrapers," Journal of Urban Economics, Elsevier, vol. 64(1), pages 49-64, July.
    3. Jason Barr, 2012. "Skyscraper Height," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 723-753, October.
    4. Grenadier, Steven R, 1996. "The Strategic Exercise of Options: Development Cascades and Overbuilding in Real Estate Markets," Journal of Finance, American Finance Association, vol. 51(5), pages 1653-1679, December.
    5. Brueckner, Jan K., 1987. "The structure of urban equilibria: A unified treatment of the muth-mills model," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 20, pages 821-845, Elsevier.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arvydas Jadevicius, 2016. "Skyscraper indicator and its application in the UK," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(2), pages 37-49.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2018. "The vertical city: Rent gradients, spatial structure, and agglomeration economies," Journal of Urban Economics, Elsevier, vol. 106(C), pages 101-122.
    2. Hans R. A. Koster & Piet Rietveld & Jos N. van Ommerren, 2011. "Is the Sky the Limit? An Analysis of High-Rise Office Buildings," SERC Discussion Papers 0086, Centre for Economic Performance, LSE.
    3. Prashant Das & Patrick Smith & Paul Gallimore, 2018. "Pricing Extreme Attributes in Commercial Real Estate: the Case of Hotel Transactions," The Journal of Real Estate Finance and Economics, Springer, vol. 57(2), pages 264-296, August.
    4. Arvydas Jadevicius, 2016. "Skyscraper indicator and its application in the UK," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(2), pages 37-49.
    5. Brueckner, Jan K. & Singh, Ruchi, 2020. "Stringency of land-use regulation: Building heights in US cities," Journal of Urban Economics, Elsevier, vol. 116(C).
    6. Jason Barr, 2013. "Skyscrapers And Skylines: New York And Chicago, 1885–2007," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 369-391, August.
    7. Jason Barr & Bruce Mizrach & Kusum Mundra, 2015. "Skyscraper height and the business cycle: separating myth from reality," Applied Economics, Taylor & Francis Journals, vol. 47(2), pages 148-160, January.
    8. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    9. Jason Barr & Remi Jedwab, 2023. "Exciting, boring, and nonexistent skylines: Vertical building gaps in global perspective," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(6), pages 1512-1546, November.
    10. Ahlfeldt, Gabriel M. & Barr, Jason, 2022. "The economics of skyscrapers: A synthesis," Journal of Urban Economics, Elsevier, vol. 129(C).
    11. Jason Barr & Jennifer Johnson, 2020. "Skyscrapers and the Happiness of Cities," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(2), pages 344-377, April.
    12. Barr, Jason & Smith, Fred H. & Kulkarni, Sayali J., 2018. "What's Manhattan worth? A land values index from 1950 to 2014," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 1-19.
    13. Barr, Jason & Cohen, Jeffrey P., 2014. "The floor area ratio gradient: New York City, 1890–2009," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 110-119.
    14. Lu, Jiaxuan, 2023. "The economics of China’s between-city height competition: A regression discontinuity approach," Regional Science and Urban Economics, Elsevier, vol. 100(C).
    15. Ahlfeldt, Gabriel M. & Barr, Jason, 2022. "Viewing urban spatial history from tall buildings," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    16. Valentina Antoniucci & Giuliano Marella, 2014. "Torri incompiute: i costi di produzione della rigenerazione urbana in contesti ad alta densit?," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2014(3), pages 117-124.
    17. Jayson Danton & Alexander Himbert, 2017. "Residential Vertical Rent Gradients in the City," Cahiers de Recherches Economiques du Département d'économie 17.11, Université de Lausanne, Faculté des HEC, Département d’économie.
    18. David Adams & Alan Disberry & Norman Hutchison & Thomas Munjoma, 2001. "Ownership Constraints to Brownfield Redevelopment," Environment and Planning A, , vol. 33(3), pages 453-477, March.
    19. Helen Weeds, 2002. "Strategic Delay in a Real Options Model of R&D Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(3), pages 729-747.
    20. Bustamante, Maria Cecilia, 2011. "Strategic investment, industry concentration and the cross section of returns," LSE Research Online Documents on Economics 37454, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    latin america; cities; urban economics; built environment jel classification: r14; c70; l00;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L00 - Industrial Organization - - General - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa12p414. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.