Tall Building and Land Values: Height and Construction Cost Elasticities in Chicago, 1870 - 2010

Arbeitspapier

Cities around the world are experiencing unprecedented vertical growth. Yet, the economics of skyscrapers remain empirically understudied. This paper analyzes the determinants of the urban height profile by combining a micro-geographic data set on tall buildings with a unique panel of land prices covering 140 years. We provide novel 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. In line with improvements in construction technology, the land price elasticity of height increased substantially over time, rationalizing a trend to ever taller buildings. The land price elasticity of height is larger for commercial than for residential buildings, suggesting that the typical segregation of land uses within cities is not exclusively shaped by the demand side, but also by the supply side.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6730

Classification and Topics

• Classification: Wirtschaft ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Household Analysis: General ; Real Estate Markets, Spatial Production Analysis, and Firm Location: General
• Subject: Chicago ; construction cost ; density ; height ; land value ; skyscraper

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ahlfeldt, Gabriel ; McMillen, Daniel
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/173006
• Last update: 10.03.2025, 11:42 AM CET