The Dynamics of Subcenter Formation: Midtown Manhattan, 1861-1906

PublicationsUrban Economics
J. Barr, T. Tassier
Journal of Regional Science, 56(5), 754-791
Publication year: 2016

Abstract

Midtown Manhattan is the largest business district in the country. Yet only a few miles to the south is another district centered at Wall Street. This paper aims to understand when and why midtown emerged. We have created a new data set from historical New York City directories that provide the employment location, residence and job for several thousand residents in the late 19th and early 20th centuries. We supplement this with data from historical business directories. The data allow us to describe how, when and why midtown emerged as a center of commerce. We find that midtown arose because of economies of scale related to shopping, rather than congestion in lower Manhattan or wage differentials across the city. Specifically, the evidence suggests that firms moved to midtown to be near retail businesses and other commercial activity in order to be closer to customers, who had been moving north on the island throughout the 19th century. Once several industries moved from lower Manhattan it triggered a spatial equilibrium readjustment in the 1880s, which then promoted the rise of skyscrapers in midtown around the turn of the 20th century, several years before the opening of Grand Central Station in 1913.

Skyscraper Height and the Business Cycle: Separating Myth from Reality

PublicationsUrban Economics
J. Barr, B. Mizrach, K. Mundra
Applied Economics, 47(2), 148-160
Publication year: 2015

Abstract

This article is the first to rigorously test how skyscraper height and output co-move. Because builders can use their buildings for nonrational or nonpecuniary gains, it is widely believed that height competition occurs near the business cycle peaks. This would suggest that extreme building height is a leading indicator of GDP, since the tallest buildings are likely to be completed at or near the peak of a cycle. To test these claims, first we look at both the announcement and the completion dates for record-breaking buildings and find there is very little correlation with the business cycle. Second, cointegration and Granger causality tests show that while height and output are cointegrated, height does not Granger cause output. These results are robust for the United States, Canada, China and Hong Kong.

What’s Manhattan Worth? A Land Values Index from 1950 to 2014

Urban EconomicsWorking Papers
J. Barr, F. Smith, S. Kulkarni
Publication year: 2014

Abstract

Using vacant land sales, we construct a land values index for Manhattan from 1950 to 2014. We find three major cycles (1950 to 1977, 1977 to 1993, and 1993 to 2009), with land values reaching their nadir in 1977, just after the city’s fiscal crisis. Overall, we find the average annual real growth rate to be 5.5%. Since 1993, land prices have risen quite dramatically, and much faster than population or employment growth, at an average annual rate of 15.8%, suggesting that barriers to entry in real estate development are causing prices to rise faster than other measures of local wellbeing. Further, we estimate the entire amount of developable land on Manhattan in 2014 was worth approximately $1.74 trillion. This would suggest an average annual return of about 6.4% since the island was first inhabited by Dutch settlers in 1626.

The floor area ratio gradient: New York City, 1890–2009

PublicationsUrban Economics
J. Barr, J. Cohen
Regional Science and Urban Economics, 48, 110-119
Publication year: 2014

Abstract

An important measure of the capital–land ratio in urban areas is the Floor Area Ratio (FAR), which gives a building’s total floor area divided by the plot size. Variations in the FAR across cities remain an understudied measure of urban spatial structure. We examine how the FAR varies across the five boroughs of New York City. In particular, we focus on the FAR gradient over the 20th century. First we find that the gradient became steeper in the early part of the 20th century, but then flattened in the 1930s, and has remained relatively constant since the mid-1940s. Next we identify the slope of the gradient across space, using the Empire State Building as our core location. We find significant variation of the slope coefficients, using both ordinary least squares and geographically weighted regressions. We then identify subcenters, and show that while accounting for them can better capture New York’s spatial structure, by and large, the city remains monocentric with respect to its FAR. Lastly, we find a nonlinear relationship between plot sizes and the FAR across the city.

Population Density across the City: The Case of 1900 Manhattan

Urban EconomicsWorking Papers
J. Barr, T. Ort
Publication year: 2014

Abstract

The literature on urban spatial structure tends to focus on the distribution of residents within metropolitan areas. Little work, however, has explored population density patterns within the city. This paper focuses on a particularly important time and place in urban economic history: 1900 Manhattan. We investigate the determinants of residential spatial structure during a period of rapid population growth. We explore the effects of environmental factors (such as historic marshes and elevation), immigration patterns, the location to amenities, and employment centers. While environmental features and amenities were significant, their effects were dominated by the location choices of immigrants. On the supply side, we also explore how the grid plan affected density.

Skyscrapers and Skylines: New York and Chicago, 1885-2007

PublicationsUrban Economics
J. Barr
Journal of Regional Science, 53(3), 369-391
Publication year: 2013

Abstract

This paper investigates skyscraper competition between New York City and Chicago. The urban economics literature is generally silent on strategic interaction between cities, yet skyscraper rivalry between these cities is a part of U.S. historiography. This paper tests whether there is, in fact, strategic interaction across cities. First, I find that each city has positive reaction functions with respect to the other city, suggesting strategic complementarity. In regard to zoning, I find that height regulations negatively impacted each city, but produced positive responses by the other city, providing evidence for strategic substitutability.

Skyscraper Height

PublicationsUrban Economics
J. Barr
Journal of Real Estate Finance and Economics, 45(3),723-753
Publication year: 2012

Abstract

This paper investigates the determinants of skyscraper height. First a simple model is provided where potential developers desire not only profits but also social status. In equilibrium, height is a function of both the costs and benefits of construction and the heights of surrounding buildings. Using data from New York City, I empirically estimate skyscraper height over the 20th century. Via spatial regressions, I find evidence for height competition, which increases during boom times. In addition, I provide estimates of which buildings are economically “too tall” and by how many floors.

Bedrock Depth and the Formation of the Manhattan Skyline, 1890-1915

PublicationsUrban Economics
J. Barr, T. Tassier, R. Trendafilov
Journal of Economic History, 71(4), 1060-1077
Publication year: 2011

Abstract

Skyscrapers in Manhattan need to be anchored to bedrock to prevent (possibly uneven) settling. This can potentially increase construction costs if the bedrock lies deep below the surface. The conventional wisdom holds that Manhattan developed two business centers—downtown and midtown—because the depth to the bedrock is close to the surface in these locations, with a bedrock “valley” in between. We measure the effects of building costs associated with bedrock depths, relative to other important economic variables in the location of early Manhattan skyscrapers (1890-1915). We find that bedrock depths had very little influence on the skyline; rather its polycentric development was due to residential and manufacturing patterns, and public transportation hubs.

Skyscrapers and the Skyline: Manhattan, 1895–2004

PublicationsUrban Economics
J. Barr
Real Estate Economics, 38(3), 567-597
Publication year: 2010

This article investigates the market for skyscrapers in Manhattan from 1895 to 2004. Clark and Kingston (1930) have argued that extreme height is a result of profit maximization, while Helsley and Strange (2008) posit that skyscraper height can be caused, in part, by strategic interaction among builders. I provide a model for the market for building height and the number of completions, which are functions of the market fundamentals and the desire of builders to stand out in the skyline. I test this model using time series data. I find that skyscraper completions and average heights over the 20th century are consistent with profit maximization; the desire to add extra height to stand out does not appear to be a systematic determinant of building height.

Endogenous Neighborhood Selection and the Attainment of Cooperation in a Spatial Prisoner’s Dilemma Game

PublicationsUrban Economics
J. Barr, T. Tassier
Computational Economics, 35(5) 211-234
Publication year: 2010

Abstract 

There is a large literature in economics and elsewhere on the emergence and evolution of cooperation in the repeated Prisoner’s Dilemma. Recently this literature has expanded to include games in a setting where agents play only with local neighbors in a specified geography. In this paper we explore how the ability of agents to move and choose new locations and new neighbors influences the emergence of cooperation. First, we explore the dynamics of cooperation by investigating agent strategies that yield Markov transition probabilities. We show how different agent strategies yield different Markov chains which generate different asymptotic behaviors in regard to the attainment of cooperation. Second, we investigate how agent movement affects the attainment of cooperation in various networks using agent-based simulations. We show how network structure and density can affect cooperation with and without agent movement.

Segregation and Strategic Neighborhood Interaction

PublicationsUrban Economics
J. Barr, T. Tassier
Eastern Economic Journal, 34,(4),480-503
Publication year: 2008

Abstract

We introduce social interactions into the Schelling model of residential choice; these interactions take the form of a Prisoner’s Dilemma game. We first study a Schelling model and a spatial Prisoner’s Dilemma model separately to provide benchmarks for studying a combined model, with preferences over like-typed neighbors and payoffs in the spatial Prisoner’s Dilemma game. We find that the presence of these additional social interactions may increase or decrease segregation compared to the standard Schelling model. If the social interactions result in cooperation then segregation is reduced, otherwise it can be increased.