Essays on urban economics and the shape of cities

Arango Isaza, Mauricio

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https://hdl.handle.net/2142/115552 Copy

Description

Title

Essays on urban economics and the shape of cities

Author(s)

Arango Isaza, Mauricio

Issue Date

2022-04-20

Director of Research (if dissertation) or Advisor (if thesis)

Albouy, David

Doctoral Committee Chair(s)

Albouy, David

Committee Member(s)

• McMillen, Daniel
• Lehe, Lewis
• Shin, Minchul

Department of Study

Economics

Discipline

Economics

Degree Granting Institution

University of Illinois at Urbana-Champaign

Degree Name

Ph.D.

Degree Level

Dissertation

Keyword(s)

• urban economics
• transportation economics
• congestion
• parking
• pedestrian-friendly
• skyscrapers
• land values

Abstract

Most of the world’s population lives in cities. This urbanization trend has been going on for decades, shaping cities into densely populated hubs where space has become a scarce commodity. The United States is familiar with this phenomenon; in major cities around the country, the cost of living keeps rising and living spaces keep shrinking. These trends paved the way for transformations aimed to improve life in dense locations. For instance, skyscrapers are economically viable since the high price of land makes pilling up residential and office space a reasonable solution. In this same vein, owning a car has become more expensive, as parking has become a scarce commodity. This thesis looks at the distribution and use of space from different perspectives: parking and congestion; walkability; and the relationship between population, land values, and building heights. In Chapter One, I use a novel block-by-block panel data set of the price and location of garages and curbside parking to map and assess the congestion cost of on-street parking in New York City. For the average 9-to-5 car commuter, the difference-in-differences estimates show a 10% increase in travel time due to delays caused by other drivers parking on-street. Simulations based on the theoretical model show that: (i) 43% of the free on-street parking consumer surplus is eroded by self-generated congestion externalities, and (ii) most drivers have a significant incentive to cruise for parking, especially in congested locations (e.g., in Manhattan south of 96th Street). Chapter Two analyses pedestrian friendliness. To do this, I use data on the price and location of garages to build a market-driven measure of walkability for New York City and Chicago. The measure is based on a theoretical model of price competition between garage operators that shows how the cost of walking is embedded in parking prices. I use this framework and estimates of the theoretical model to build a proxy of the cost of walking. The proxy is later used to combine variables that characterize pedestrian friendliness into a walkability index. The Walkability Index proposed in this paper strongly correlates with the proportion of non-car commuters in New York City and other variables often associated with walkability. Chapter Three discusses the connection between population, land values, and building heights. In the United States, the height of cities' tallest buildings is strongly correlated with their greater metropolitan area's population. This is explained through land prices, which rise proportionally with population and income in a monocentric city model, while decreasing proportionally with the arc at which a city can expand. These prices, in turn, raise building heights less than proportionally through a production function for skyscrapers, mitigated by construction costs and land-use regulations. Using a system of recursive simultaneous equations, my co-authors and I endogenize income with agglomeration economies and test these economic relationships, providing a novel and intrinsically interesting instrumental variables framework for skyscraper heights.

Graduation Semester

2022-05

Type of Resource

Thesis

Copyright and License Information

Copyright 2022 Mauricio Arango Isaza

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