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Journal of Economic Geography Advance Access published online on August 18, 2005
Journal of Economic Geography, doi:10.1093/jeg/lbi003
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© The Author (2005). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oupjournals.org
Received July 29, 2004
Accepted January 20, 2005

Article

Urban growth and housing supply

Edward L. Glaeser 1*, Joseph Gyourko 2, and Raven E. Saks 3

1 Harvard University and NBER
2 The Wharton School, University of Pennsylvania
3 Harvard University

* To whom correspondence should be addressed.
Edward L. Glaeser, E-mail: eglaeser{at}harvard.edu


  Abstract

Cities are physical structures, but the modern literature on urban economic development rarely acknowledges that fact. The elasticity of housing supply helps determine the extent to which increases in productivity will create bigger cities or just higher paid workers and more expensive homes. In this article, we present a simple model that provides a framework for doing empirical work that integrates the heterogeneity of housing supply into urban development. Empirical analysis yields results consistent with the implications of the model that differences in the nature of house supply across space are not only responsible for higher housing prices, but also affect how cities respond to increases in productivity.

Keywords: urban growth; housing supply; zoning.
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