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Rosenthal paper on employment density and agglomeration economies published in RS&UE

May 10, 2020

Employment Density and Agglomeration Economies in Tall Buildings

Crocker H. Liu, Stuart S. Rosenthal & William C. Strange

Regional Science and Urban Economics, May 2020

Stuart Rosenthal

Stuart Rosenthal

This paper examines vertical patterns of employment density and agglomeration economies within tall buildings. Theory suggests that vertical density should depend on the interplay of street access, heightrelated amenities, and productivity.

Based on suite level data, the authors show that density patterns are u-shaped, with high density at ground level and high floors. Furthermore, factors associated with productivity, including nearby employment and firm-specific characteristics, have positive effects on employment density. Vertical density patterns are consistent with productivity spillovers that are strongest on a company’s floor and attenuate rapidly with vertical distance. Similar evidence is obtained based on sales for law firms.