Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282472 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10784
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
urban density
international buildings heights
skyscrapers
tall buildings
sustainable urbanization
city growth
commercial real estate
housing supply
urban sprawl
land savings
housing affordability
geographical constraints
environment
JEL: 
R11
R12
R14
R31
R33
O18
O13
Document Type: 
Working Paper
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