Skyscraper Height Jason Barr∗ Rutgers University, Newark
[email protected] Rutgers University Newark Working Paper #2008-002 Abstract This paper investigates the determinants of skyscraper height. First a simple model is provided where potential developers desire not only profits but also status, as measured by their rank in the height hi- erarchy. The optimal height in equilibrium is a function of the cost and benefits of building as well as the height of surrounding buildings. Using data from New York City, I empirically estimate skyscraper height over the 20th century. The results show that the quest for status has increased building height by about 15 floors above the non- status profit maximizing height. In addition, I provide estimates of which buildings are “too tall” and by how many floors. JEL Classification: D24, D44, N62, R33 Key words: Skyscrapers, building height, status, New York City ∗I would like to thank Alexander Peterhansl, Howard Bodenhorn, Sara Markowitz and seminar participants at Lafayette College for their helpful comments. I would like to acknowledge the New York City Hall Library, the New York City Department of City Planning and the Real Estate Board of New York for the provision of data. This work was partially funded from a Rutgers University, Newark Research Council Grant. Any errors are mine. 1 1 Introduction Skyscrapers are not simply tall buildings. They are symbols and works of art. Collectively they generate a separate entity—the skyline—which has its own symbolic and aesthetic importance. Despite the initial fears that the attacks of September 11, 2001 would cur- tail construction, skyscrapers continue to be built in large numbers around the globe (Economist, 2006).