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The skyscraper revolution: global economic development and land savings

Ahlfeldt, Gabriel M. ORCID: 0000-0001-5664-3230, Baum-Snow, Nathaniel and Jedwab, Remi (2023) The skyscraper revolution: global economic development and land savings. CEP Discussion Papers (CEPDP1959). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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.

Item Type: Monograph (Discussion Paper)
Official URL: https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information: © 2023 The Author(s)
Divisions: Geography & Environment
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
JEL classification: R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R14 - Land Use Patterns
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R33 - Nonagricultural and Nonresidential Real Estate Markets
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Date Deposited: 16 Jan 2024 15:45
Last Modified: 16 May 2024 12:32
URI: http://eprints.lse.ac.uk/id/eprint/121293

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