Pub Date : 2025-09-01Epub Date: 2025-07-07DOI: 10.1016/j.regsciurbeco.2025.104132
Justin Tyndall
This paper estimates the impact of a new transit system on worker outcomes, accounting for endogenous worker decisions. I examine the phased opening of New York City’s commuter ferry system. I find evidence of a small but significant shift in commuting flows, towards routes with ferry service, driven by middle-to-high-income workers. I then propose and estimate a novel structural neighborhood choice model that recovers workers’ valuation of ferry service and the aggregate effects of the system on employment. Higher-income workers display a stronger preference for the ferry. Ferry routes also match the location preferences of higher-income workers, allowing these workers to capture almost all direct benefits from the new system. Differing home and work location preferences across income groups largely determine who benefits from a new transit system.
{"title":"Estimating commuter benefits of a new transit system: Evidence from New York City’s ferry service","authors":"Justin Tyndall","doi":"10.1016/j.regsciurbeco.2025.104132","DOIUrl":"10.1016/j.regsciurbeco.2025.104132","url":null,"abstract":"<div><div>This paper estimates the impact of a new transit system on worker outcomes, accounting for endogenous worker decisions. I examine the phased opening of New York City’s commuter ferry system. I find evidence of a small but significant shift in commuting flows, towards routes with ferry service, driven by middle-to-high-income workers. I then propose and estimate a novel structural neighborhood choice model that recovers workers’ valuation of ferry service and the aggregate effects of the system on employment. Higher-income workers display a stronger preference for the ferry. Ferry routes also match the location preferences of higher-income workers, allowing these workers to capture almost all direct benefits from the new system. Differing home and work location preferences across income groups largely determine who benefits from a new transit system.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104132"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144587749","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-07-31DOI: 10.1016/j.regsciurbeco.2025.104137
Naruki Notsu , Haruaki Hirota , Nobuo Akai
This study examines the effects of enhancing administrative tax enforcement on the tax gap, focusing on inter-municipal cooperation (IMC). IMC involves collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially reduces the tax gap by reinforcing tax enforcement in local governments. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance.
{"title":"Inter-municipal cooperation and tax enforcement capabilities","authors":"Naruki Notsu , Haruaki Hirota , Nobuo Akai","doi":"10.1016/j.regsciurbeco.2025.104137","DOIUrl":"10.1016/j.regsciurbeco.2025.104137","url":null,"abstract":"<div><div>This study examines the effects of enhancing administrative tax enforcement on the tax gap, focusing on inter-municipal cooperation (IMC). IMC involves collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially reduces the tax gap by reinforcing tax enforcement in local governments. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104137"},"PeriodicalIF":2.9,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144779552","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-06-18DOI: 10.1016/j.regsciurbeco.2025.104129
Brent W. Ambrose , Maxence Valentin
This study examines the connection between federal tax policies and the capitalization of local public goods into housing prices, focusing on the deduction of State and Local Taxes (SALT). In the United States, taxpayers can deduct taxes paid to local jurisdictions from their federal taxable incomes, effectively reducing the net cost of local public goods. We develop a theoretical model of local public goods capitalization that predicts a higher capitalization of public goods in jurisdictions with a greater share of residents who deduct local taxes. We test this prediction by exploiting local exposure to national fiscal changes from the 2017 Tax Cuts and Jobs Act (TCJA) in a shift-share instrumental variable framework. Using school district spending, we find empirical support that a higher share of residents deducting property taxes causes a greater capitalization of local public spending. In particular, a one-standard-deviation increase in school spending corresponds to a 1.2% decrease in house value in school districts where no resident deducts property taxes but to a 2.8% rise in values in districts where 25% of the residents take advantage of the property tax deduction. Our results thus emphasize the importance of the interaction between local and national policies when evaluating the optimal level of local public good provision, and provide guidance for evaluating the future of the SALT deductions.
{"title":"Federal tax policy and the capitalization of local public goods","authors":"Brent W. Ambrose , Maxence Valentin","doi":"10.1016/j.regsciurbeco.2025.104129","DOIUrl":"10.1016/j.regsciurbeco.2025.104129","url":null,"abstract":"<div><div>This study examines the connection between federal tax policies and the capitalization of local public goods into housing prices, focusing on the deduction of State and Local Taxes (SALT). In the United States, taxpayers can deduct taxes paid to local jurisdictions from their federal taxable incomes, effectively reducing the net cost of local public goods. We develop a theoretical model of local public goods capitalization that predicts a higher capitalization of public goods in jurisdictions with a greater share of residents who deduct local taxes. We test this prediction by exploiting local exposure to national fiscal changes from the 2017 Tax Cuts and Jobs Act (TCJA) in a shift-share instrumental variable framework. Using school district spending, we find empirical support that a higher share of residents deducting property taxes causes a greater capitalization of local public spending. In particular, a one-standard-deviation increase in school spending corresponds to a 1.2% decrease in house value in school districts where no resident deducts property taxes but to a 2.8% rise in values in districts where 25% of the residents take advantage of the property tax deduction. Our results thus emphasize the importance of the interaction between local and national policies when evaluating the optimal level of local public good provision, and provide guidance for evaluating the future of the SALT deductions.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104129"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144329773","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-07-05DOI: 10.1016/j.regsciurbeco.2025.104133
Bruno De Borger , Ismir Mulalic , Jan Rouwendal
In this paper, we study the productivity and wage effects of a large and very localized discrete shock in the quality of transport infrastructure, viz. the opening of the Great Belt Bridge connecting the Copenhagen area with the neighboring island Funen and the mainland of Denmark. We focus on two effects: (i) an accessibility externality, captured via changes in an accessibility indicator at the municipal level; (ii) better matching of workers to jobs, enabled by to the shorter travel times after the opening of the bridge. We can disentangle the accessibility and matching effects, because better matching is only realized via new commutes crossing the Great Belt after the opening of the bridge. Our results show that the increased accessibility had significant positive effects on productivity as well as wages, the latter being much more localized. The productivity effects of improved labour market matching are larger than the accessibility effects, but they are restricted to a small share of the firms. We find a modest wage effect of better matching, suggesting that employees get a small wage increase on top of the commuting cost savings associated with the opening of the bridge. Overall, the estimates suggest that firms benefited more from the opening of the bridge than did workers. Moreover, the bridge benefited mainly highly educated and male workers, and it increased wage inequality.
{"title":"Productivity and wage effects of an exogenous improvement in transport infrastructure: Accessibility and the Great Belt Bridge","authors":"Bruno De Borger , Ismir Mulalic , Jan Rouwendal","doi":"10.1016/j.regsciurbeco.2025.104133","DOIUrl":"10.1016/j.regsciurbeco.2025.104133","url":null,"abstract":"<div><div>In this paper, we study the productivity and wage effects of a large and very localized discrete shock in the quality of transport infrastructure, viz. the opening of the Great Belt Bridge connecting the Copenhagen area with the neighboring island Funen and the mainland of Denmark. We focus on two effects: (i) an accessibility externality, captured via changes in an accessibility indicator at the municipal level; (ii) better matching of workers to jobs, enabled by to the shorter travel times after the opening of the bridge. We can disentangle the accessibility and matching effects, because better matching is only realized via new commutes crossing the Great Belt after the opening of the bridge. Our results show that the increased accessibility had significant positive effects on productivity as well as wages, the latter being much more localized. The productivity effects of improved labour market matching are larger than the accessibility effects, but they are restricted to a small share of the firms. We find a modest wage effect of better matching, suggesting that employees get a small wage increase on top of the commuting cost savings associated with the opening of the bridge. Overall, the estimates suggest that firms benefited more from the opening of the bridge than did workers. Moreover, the bridge benefited mainly highly educated and male workers, and it increased wage inequality.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104133"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144597467","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-06-27DOI: 10.1016/j.regsciurbeco.2025.104131
Jan Rouwendal , Or Levkovich , Edwin Buitelaar , Jip Claassens
This paper demonstrates that the prices of older commercial buildings increase relative to younger ones. We argue that this is a ‘vintage effect’ that is due to the increasing valuation of older buildings by their marginal occupant in an expanding market. We show that this effect is not due to local price trends, or listing or preservation zones. Furthermore, it is not confined to urban locations or buildings visible from main roads, and it is most pronounced for buildings constructed before 1960. Repeat sales analysis confirms the results of hedonic regressions. Further analysis of the office market, for which the vintage effect is strongest, confirms that survival probabilities and occupancy rates are highest for older buildings. These findings suggest that commercial buildings have a longer lifespan than is often thought, making the built environment less dynamic.
{"title":"Vintage effects in commercial real estate and the dynamics of the built environment","authors":"Jan Rouwendal , Or Levkovich , Edwin Buitelaar , Jip Claassens","doi":"10.1016/j.regsciurbeco.2025.104131","DOIUrl":"10.1016/j.regsciurbeco.2025.104131","url":null,"abstract":"<div><div>This paper demonstrates that the prices of older commercial buildings increase relative to younger ones. We argue that this is a ‘vintage effect’ that is due to the increasing valuation of older buildings by their marginal occupant in an expanding market. We show that this effect is not due to local price trends, or listing or preservation zones. Furthermore, it is not confined to urban locations or buildings visible from main roads, and it is most pronounced for buildings constructed before 1960. Repeat sales analysis confirms the results of hedonic regressions. Further analysis of the office market, for which the vintage effect is strongest, confirms that survival probabilities and occupancy rates are highest for older buildings. These findings suggest that commercial buildings have a longer lifespan than is often thought, making the built environment less dynamic.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104131"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144654103","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-07-01DOI: 10.1016/j.regsciurbeco.2025.104126
Daniele Coen-Pirani
This paper examines how mobility costs influence the effectiveness and desirability of tax progressivity using a general equilibrium spatial model. A key feature of the model is that workers’ idiosyncratic productivity depends on location. The interaction of amenities, idiosyncratic shocks and moving costs implies that progressive taxation distorts location choices by reducing incentives for agents to relocate to their most productive areas. Using a quantitative framework, I find that the negative effect of tax progressivity on output is weakest when mobility costs are either relatively low or high. The optimal degree of tax progressivity balances the costs of spatial tax distortions against the benefits of enhanced insurance, leading to relatively high optimal progressivity at both extremes of mobility costs.
{"title":"Tax progressivity and mobility costs","authors":"Daniele Coen-Pirani","doi":"10.1016/j.regsciurbeco.2025.104126","DOIUrl":"10.1016/j.regsciurbeco.2025.104126","url":null,"abstract":"<div><div>This paper examines how mobility costs influence the effectiveness and desirability of tax progressivity using a general equilibrium spatial model. A key feature of the model is that workers’ idiosyncratic productivity depends on location. The interaction of amenities, idiosyncratic shocks and moving costs implies that progressive taxation distorts location choices by reducing incentives for agents to relocate to their most productive areas. Using a quantitative framework, I find that the negative effect of tax progressivity on output is weakest when mobility costs are either relatively low or high. The optimal degree of tax progressivity balances the costs of spatial tax distortions against the benefits of enhanced insurance, leading to relatively high optimal progressivity at both extremes of mobility costs.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104126"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144587750","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-08-26DOI: 10.1016/j.regsciurbeco.2025.104143
Yingdan Mei , Xiaoning Su , Pengfei Liu , Hong Lan , Yueming (Lucy) Qiu
Investment in hydrogen energy infrastructure is a promising way to achieve low-carbon and sustainable development. We provide a comprehensive assessment on the economic impact of hydrogen refueling stations (HRSs) based on the geocoded information on HRSs and housing transaction records from 2014 to 2023 in China. Our study reveals that establishing a HRS significantly lowers the transaction prices of surrounding housing within 1.4 km. Furthermore, the construction of a HRS significantly reduces housing prices by 7.65 %, mostly caused by the first constructed station. HRSs in areas with high population density have a greater negative impact on housing prices. Higher levels for environmental awareness among residents and government alleviate negative impacts. Visual exposure may exacerbate residents’ negative perceptions, prompting some individuals to relocate due to perceived uncertainty surrounding the HRS, thereby contributing to a decline in housing prices. Our results provide significant policy implications for appropriate intervention strategies to alleviate HRS-driven externalities.
{"title":"The economic impact of hydrogen energy infrastructure in China","authors":"Yingdan Mei , Xiaoning Su , Pengfei Liu , Hong Lan , Yueming (Lucy) Qiu","doi":"10.1016/j.regsciurbeco.2025.104143","DOIUrl":"10.1016/j.regsciurbeco.2025.104143","url":null,"abstract":"<div><div>Investment in hydrogen energy infrastructure is a promising way to achieve low-carbon and sustainable development. We provide a comprehensive assessment on the economic impact of hydrogen refueling stations (HRSs) based on the geocoded information on HRSs and housing transaction records from 2014 to 2023 in China. Our study reveals that establishing a HRS significantly lowers the transaction prices of surrounding housing within 1.4 km. Furthermore, the construction of a HRS significantly reduces housing prices by 7.65 %, mostly caused by the first constructed station. HRSs in areas with high population density have a greater negative impact on housing prices. Higher levels for environmental awareness among residents and government alleviate negative impacts. Visual exposure may exacerbate residents’ negative perceptions, prompting some individuals to relocate due to perceived uncertainty surrounding the HRS, thereby contributing to a decline in housing prices. Our results provide significant policy implications for appropriate intervention strategies to alleviate HRS-driven externalities.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104143"},"PeriodicalIF":2.9,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144917882","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-06-25DOI: 10.1016/j.regsciurbeco.2025.104128
Camilo Acosta , Ditte Håkonsson Lyngemark
This paper studies the spatial organization of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis: (i) firms have become increasingly spatially fragmented, and (ii) headquarters (HQ) establishments have become more manager-intensive. We develop and estimate a structural model in which firms allocate labor across establishments and produce non-rival, manager-intensive HQ services. Identification relies on exogenous variation in labor supply induced by commuting-augmented immigration shocks. We estimate elasticities of substitution across establishments of −9.8 for workers and −1.1 for managers, consistent with firms reallocating general labor more easily than managerial inputs. Our decomposition shows that rising managerial wages at HQs – interacted with firm-level scale effects – explain about half of the observed increase in HQ managerial intensity, highlighting the importance of intangible internal inputs in shaping firm spatial structure.
{"title":"Spatial wage differentials, geographic frictions and the organization of labor within firms","authors":"Camilo Acosta , Ditte Håkonsson Lyngemark","doi":"10.1016/j.regsciurbeco.2025.104128","DOIUrl":"10.1016/j.regsciurbeco.2025.104128","url":null,"abstract":"<div><div>This paper studies the spatial organization of firms, both theoretically and empirically. Two new facts in Danish register data motivate the analysis: (i) firms have become increasingly spatially fragmented, and (ii) headquarters (HQ) establishments have become more manager-intensive. We develop and estimate a structural model in which firms allocate labor across establishments and produce non-rival, manager-intensive HQ services. Identification relies on exogenous variation in labor supply induced by commuting-augmented immigration shocks. We estimate elasticities of substitution across establishments of −9.8 for workers and −1.1 for managers, consistent with firms reallocating general labor more easily than managerial inputs. Our decomposition shows that rising managerial wages at HQs – interacted with firm-level scale effects – explain about half of the observed increase in HQ managerial intensity, highlighting the importance of intangible internal inputs in shaping firm spatial structure.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104128"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144501007","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-09-01Epub Date: 2025-06-26DOI: 10.1016/j.regsciurbeco.2025.104130
Niels M. Kuiper , Mark van Duijn , Arno J. van der Vlist
We study the local labor market effects of a place-based policy aimed at the preservation and economic re-use of urban built heritage in the Netherlands. We use establishment-level labor market data and a difference-in-differences approach to identify both direct and spillover effects of these redevelopment projects on local labor markets. Our findings show that these projects tend to follow, and at times reinforce, processes of neighborhood change, targeting areas already experiencing relative labor market decline and shifts in the industry mix. While we do not find that these projects reverse or halt decline through local spillover effects, we do find clear direct effects: the projects attract jobs and firms to the redevelopment sites in numbers that outweigh the ongoing negative labor market trends, pointing to a distinct and positive local economic impact.
{"title":"Do urban redevelopment projects attract jobs? Evidence from the Dutch National Restoration Fund","authors":"Niels M. Kuiper , Mark van Duijn , Arno J. van der Vlist","doi":"10.1016/j.regsciurbeco.2025.104130","DOIUrl":"10.1016/j.regsciurbeco.2025.104130","url":null,"abstract":"<div><div>We study the local labor market effects of a place-based policy aimed at the preservation and economic re-use of urban built heritage in the Netherlands. We use establishment-level labor market data and a difference-in-differences approach to identify both direct and spillover effects of these redevelopment projects on local labor markets. Our findings show that these projects tend to follow, and at times reinforce, processes of neighborhood change, targeting areas already experiencing relative labor market decline and shifts in the industry mix. While we do not find that these projects reverse or halt decline through local spillover effects, we do find clear direct effects: the projects attract jobs and firms to the redevelopment sites in numbers that outweigh the ongoing negative labor market trends, pointing to a distinct and positive local economic impact.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"114 ","pages":"Article 104130"},"PeriodicalIF":3.5,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144686769","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-06-01Epub Date: 2025-04-13DOI: 10.1016/j.regsciurbeco.2025.104107
Daniel Garcia, Raven Molloy
Of all major industries, construction is the only one to have registered negative average productivity growth since 1987. Mechanically, this lackluster performance owes to the fact that indexes measuring the cost of building a constant-quality structure have risen much faster than those measuring the cost of producing other goods. We assess the extent to which growth in construction costs could be biased upward by improvements in unobserved structure quality. Even under generous assumptions, our estimates of the magnitude of this bias are not large enough to alter the view that construction-sector productivity growth has been weak. Next, we calculate new estimates of single-family residential construction productivity growth by state and metropolitan area from 1980 to 2019. These estimates reveal that productivity has declined the most in areas with a larger fraction of construction in the urban core and with tighter housing supply constraints, especially in locations with long permitting times.
{"title":"Reexamining lackluster productivity growth in construction","authors":"Daniel Garcia, Raven Molloy","doi":"10.1016/j.regsciurbeco.2025.104107","DOIUrl":"10.1016/j.regsciurbeco.2025.104107","url":null,"abstract":"<div><div>Of all major industries, construction is the only one to have registered negative average productivity growth since 1987. Mechanically, this lackluster performance owes to the fact that indexes measuring the cost of building a constant-quality structure have risen much faster than those measuring the cost of producing other goods. We assess the extent to which growth in construction costs could be biased upward by improvements in unobserved structure quality. Even under generous assumptions, our estimates of the magnitude of this bias are not large enough to alter the view that construction-sector productivity growth has been weak. Next, we calculate new estimates of single-family residential construction productivity growth by state and metropolitan area from 1980 to 2019. These estimates reveal that productivity has declined the most in areas with a larger fraction of construction in the urban core and with tighter housing supply constraints, especially in locations with long permitting times.</div></div>","PeriodicalId":48196,"journal":{"name":"Regional Science and Urban Economics","volume":"113 ","pages":"Article 104107"},"PeriodicalIF":3.5,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143904356","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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