Housing Constraints and Spatial Misallocation: Comment

Brian Greaney

American Economic Journal: Macroeconomics, 2026, vol. 18, issue 2, 409-28

Abstract: Hsieh and Moretti (2019) find that relaxing land use regulations in three productive US cities would increase GDP by 3.7 percent. In this comment, I revisit their findings. I first attempt to replicate their result and find that their counterfactual would lower output. I document errors in their code that explain this discrepancy. I next show that the results of their model depend on the arbitrary choice of population unit. I propose a modification to their model that eliminates unit dependence. Their experiment raises output in the modified model, but the effect is two orders of magnitude smaller than what they report.

JEL-codes: E23 J24 J31 R23 R31 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/mac.20230141

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