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Seminar: The skyscraper revolution: Global economic development andland savings

Tinbergen Institute

The construction of tall buildings has been central in facilitating sustainable urbanization and growth in cities around the world. Using supply side variation for identification, we demonstrate that the average elasticity of city population to aggregate city building heights is 0.12, and that of city built area to heights is -0.17. Land saved from 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 of static demand differences and the geography of bedrock as instruments for observed changes in height, a triple difference identification strategy. Central to the analysis is newly organized data on the population, land area, and a measure of total height for 1975-2015 in 12,877 cities worldwide. Quantification using a canonical urban model suggests that about two-thirds of the potential benefits from reductions in the cost of heights has been realized. Worker welfare would increase by 1% if constraints to vertical development were relaxed, though aggregate land rents would decline by 2%.


  • Gabriel Ahlfeldt (London School of Economics)


Gustav Mahlerplein 117,
1082 MS Amsterdam