The Skyscraper Revolution: Global Economic Development and Land Savings

Gabriel Ahlfeldt, Nathaniel Baum-Snow and Remi Jedwab

No 18604, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

JEL-codes: O13 O18 R11 R12 R14 R31 R33 (search for similar items in EconPapers)
Date: 2023-11
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