TY  - JOUR
AU  - Albouy,David
AU  - Ehrlich,Gabriel
TI  - Metropolitan Land Values and Housing Productivity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18110
PY  - 2012
Y2  - May 2012
UR  - http://www.nber.org/papers/w18110
L1  - http://www.nber.org/papers/w18110.pdf
N1  - Author contact info:
David Albouy
Department of Economics
University of Michigan
611 Tappan Street
351C Lorch Hall
Ann Arbor, MI 48109-1220
Tel: 734/763-9619
E-Mail: albouy@umich.edu

Gabriel Ehrlich
Congressional Budget Office
Ford House Office Building Room 455C
441 D St SW
Washington, DC 20024
Tel: (202)-226-2770
E-Mail: gabriel.ehrlich@cbo.gov
AB  - We present the first nationwide index of directly-measured land values by metropolitan area and investigate their relationship with housing prices. Construction prices and geographic and regulatory constraints are shown to increase the cost of housing relative to land. On average, approximately one-third of housing costs are due to land, with an increasing share in higher-value areas, implying an elasticity of substitution between land and other inputs of about one-half. Conditional on land and construction prices, housing productivity is relatively low in larger cities. The increase in housing costs associated with greater regulation appears to outweigh any benefits from improved quality-of-life.
ER  -