Determining Optimal Building Height

Urban Studies, Vol. 44, No. 3, pp. 591-607

23 Pages Posted: 1 Apr 2009 Last revised: 26 Dec 2012

See all articles by K.W. Chau

K.W. Chau

The University of Hong Kong - Ronald Coase Centre for Property Rights Research - Economics

Siu Kei Wong

University of Hong Kong

Y. Yau

The University of Hong Kong

A.K.C. Cheung

The University of Hong Kong

Date Written: January 1, 2007

Abstract

The paper examines how building height is determined in the absence of building height regulatory restrictions. A model is developed for determining optimal height using simple neo-classical economic analysis; this is then tested using empirical data from Hong Kong. The results show that the observed building heights are consistent with the optimal height predicted by the model. In addition, it was also found that the point of optimality varied positively with the quality of the external environment. An important practical implication is that town planners and policy-makers can make use of the model as a benchmarking tool to assess and quantify the effect of imposing or relaxing height restrictions.

Keywords: Hedonic price, Building height, Construction cost, Property price, Hong Kong

Suggested Citation

Chau, Kwong Wing and Wong, Siu Kei and Yau, Y. and Cheung, A.K.C., Determining Optimal Building Height (January 1, 2007). Urban Studies, Vol. 44, No. 3, pp. 591-607, Available at SSRN: https://ssrn.com/abstract=1371340

Kwong Wing Chau

The University of Hong Kong - Ronald Coase Centre for Property Rights Research - Economics ( email )

Ronald Coase Centre for Property Rights Research
Pokfulam Road
Hong Kong
Hong Kong
(852)28592128 (Phone)
(852)25599457 (Fax)

Siu Kei Wong (Contact Author)

University of Hong Kong ( email )

Pokfulam Road
Hong Kong, HK
China

Y. Yau

The University of Hong Kong

Pokfulam Road
Hong Kong, Pokfulam HK
China

A.K.C. Cheung

The University of Hong Kong

Pokfulam Road
Hong Kong, Pokfulam HK
China

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