Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872
Historical city growth, in the United States and worldwide, has required remarkable transformation of outdated durable buildings. Private land-use decisions may generate inefficiencies, however, due to externalities and various rigidities. This paper analyzes new plot-level data in the aftermath of the Great Boston Fire of 1872, estimating substantial economic gains from the created opportunity for widespread reconstruction. An important mechanism appears to be positive externalities from neighbors' reconstruction. Strikingly, gains from this opportunity for urban redevelopment were sufficiently large that increases in land values were comparable to the previous value of all buildings burned.
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Copy CitationRichard Hornbeck and Daniel Keniston, "Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872," NBER Working Paper 20467 (2014), https://doi.org/10.3386/w20467.
Published Versions
Richard Hornbeck & Daniel Keniston, 2017. "Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872," American Economic Review, American Economic Association, vol. 107(6), pages 1365-1398, June. citation courtesy of 
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