Skyscraper Height and the Business Cycle: Separating Myth from Reality
37 Pages Posted: 10 Dec 2011 Last revised: 16 Jul 2014
Date Written: July 1, 2014
This paper is the first to rigorously test how height and output co-move. Because builders can use their buildings for non-rational or non-pecuniary gains, it is widely believed that (a) the most severe forms of height competition occur near the business cycle peaks and (b) that extreme height are examples of developers “gone wild.” We find virtually no support for either of these popularly held claims. First we look at both the announcement and 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 height and output are cointegrated and that height does not Granger cause output. These results are robust for the United States, Canada, China and Hong Kong.
Keywords: skyscraper height, business cycle, Granger causality, cointegration
JEL Classification: E3, N1, R33
Suggested Citation: Suggested Citation