Study Quantifies the Large Economic Cost of NIMBY Politics

A new study by economists Chang-Tai Hsieh and Enrico Moretti claims to have found the cost, in economic growth, incurred by the high price of housing in expensive coastal cities. Hint: the word trillion is involved.

July 16, 2014, 5:00 AM PDT

By James Brasuell @CasualBrasuell


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A new study, explained by Timothy B. Lee for Vox, hinges on the growing income imbalance between cities around the country: "People with similar skills and similar levels of education make a lot more money in New York and San Francisco than they do in St. Louis or Cleveland." 

That leads to a rational assumption: "If housing wasn't so expensive in coastal cities, a lot more people would move to New York, Washington, Boston, Seattle, and the San Francisco Bay Area."

Moreover, the study uses data that suggest, "even after controlling for factors such as education — workers in these cities are more productive than in other metropolitan areas."

So, "Hsieh and Moretti estimate that moving American workers to higher-productivity cities could increase the income of Americans by a stunning amount…" (pause for effect) "...more than $1 trillion."

The study also identifies a culprit in this act of economic sabotage: "Hsieh and Moretti's analysis suggests that housing restrictions — and the Not In My Backyard (NIMBY) activists who lobby for them — are costing the American economy tens — perhaps hundreds — of billions of dollars per year."

Tuesday, July 15, 2014 in Vox

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