Wednesday, May 9, 2018

Why Aren’t All Tall Buildings in the Same Neighborhood the Same Height?


Tyler Cowen posts:
Let’s say there is a 40-story building and a 60-story building.  You would think the different builders face more or less the same costs for their height decisions.  If you want to own 60 stories, it is still the case that everyone can build the cheapest-height building, and you can buy the stories you want from a variety of sellers.

If you had lots of companies that needed 60 stories, and you didn’t want to split up those firms across locations, and lots of companies that needed only 40 stories, the differential building heights could be explained rather easily.  But that doesn’t seem to be the case.  Most tall buildings house a variety of tenants, and those tenants don’t “need the whole height” or anything close to it.

This puzzle is from Steve Landsburg, who says “color me stumped” in his new and forthcoming book Can You Outsmart An Economist? 100+ Puzzles to Train Your Brain.
I like the reply in the comments by clockwork_prior:
'Let’s say there is a
40-story building and a 60-story building.'

One built in 1961, the other built in 1991.

'You would think the different builders face more or less the same costs for their height decisions. '

Not when separated by three decades.

'This puzzle is from Steve Landsburg, who says “color me stumped” in his new and forthcoming book Can You Outsmart An Economist? 100+ Puzzles to Train Your Brain'

Yep, a classic recommendation from Prof. Cowen. Especially as one can easily look up the dates various building were built, and also correct for local factors - not all surfaces will support the same weight/height building within a city district's boundaries, much less an entire city's boundaries. But that is the sort of approach that someone familiar with working within an empirical framework would use - which seemingly excludes basically all economists. Bill MBride being a rare exception - his musings on such a particular subject would be worth reading, and probably explained in several data based paragraphs.

Of course other factors weigh in too - local infrastructure cannot be handwaved away, and if the sewage system can handle 2,500 more people without upgrading in a particular location, then it is quite likely than no plans will be made to build a high rise holding 5,000, especially when factoring in the cost of the necessary sewage upgrade to handle those 2,5000.

But date is a straightforward answer that can be empirically explored, as anyone with the least bit of familiarity with NYC would suggest without puzzling about it. Especially as date also handles the differences between periods in terms of different economic conditions, building technology, along with the assumptions about the future made at a particular point of time.
There are some in the comments section of the post  who argue against the timeframe as factor  but a quick walkthrough of different neighborhoods in cities that have areas where new construction is prevented can see the uniform low-level construction of periods gone by. Say the Beacon Hill area in Boston or most parts of Boston's Back Bay area. The same goes, for example, for the Nob Hill area of San Francisco, while the more lenient building construction regulations in  San Francisco's SoMa district results in quite a bit of roughly uniform skyscraper construction in that are the area.

I am not arguing that this is the only factor but time period is one very important factor.



-Robert Wenzel  



1 comment:

  1. If all buildings in an area are not the same height, it can only be due to discrimination by the white patriarchy. #BuildingHeightMatters. Add buildings to the list of protected classes.

    ReplyDelete