Skyscrapers and the Skyline: Manhattan, 1895-2004∗

This paper revisits an issue not studied since the 1920’s: the eco-nomic determinants of skyscraper height and completions. I study annual average heights and the number of completions in Manhattan from 1895 to 2004. First a simple model is given to provide equations for the optimal number and height. Then these equations are empiri-cally estimated. I find that, fundamentally, the market for skyscrapers has not changed over the course of the 20th century; their major cycles are determined by the ebb and flow of supply and demand variables, such as office employment, population, building costs, zoning regula-tions, and property taxes and subsidies. Counter-factual predictions are also provided to estimate the effect of government policies on sky-scrapers