The vertical city: the price of land and the height of buildings in Chicago 1870-2010

Gabriel Ahlfeldt and Daniel McMillen ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We analyze the determinants of building heights in Chicago by combining a micro-geographic data set on tall buildings with a unique panel of land prices covering 140 years. Consistent with the predictions of classic urban economics models, we find that developers respond to increasing land prices by increasing density, i.e. building taller. In 2000, the elasticity of height with respect of land price was about 45% for tall commercial buildings and 30% for tall residential buildings. As expected given significant improvement in construction technology over time, we find that the height elasticity approximately doubled over the last 100 years. We find evidence for dissipative height competition within cities, as excessively tall buildings are significantly less likely to be constructed near to each other than other buildings. Proximity to scenic amenities creates an extra incentive to outrival competitors, particularly in the residential market.

Keywords: Chicago; density; height; land value; skyscraper (search for similar items in EconPapers)
JEL-codes: R20 R30 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2015-07
New Economics Papers: this item is included in nep-agr, nep-geo, nep-his and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://eprints.lse.ac.uk/64622/ Open access version. (application/pdf)

Related works:
Working Paper: The Vertical City: The Price of Land and the Height of Buildings in Chicago 1870-2010 (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:64622

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().