David Albouy

Overview

David Albouy is an urban and public economist affiliated with the University of Illinois at Urbana-Champaign and the National Bureau of Economic Research (NBER). His research applies and extends the Rosen (1979)–Roback (1982) spatial-equilibrium framework to estimate land rents, local productivity, and the total value of amenities across U.S. metropolitan areas. Two of his papers are of particular relevance to the Georgist case: What Are Cities Worth? (2016), which infers city-level land rents from wage and housing-cost data, and Metropolitan Land Values (2018, with Ehrlich and Shin), which constructs the first cross-sectional, transaction-based land-value index for nearly every U.S. metro area. Neither paper advocates land value taxation or addresses fiscal policy; their significance for Georgism is evidentiary — they supply independent, peer-reviewed, mainstream estimates of the scale and distribution of urban land value that Georgist revenue-sufficiency and capitalization arguments depend on.

Key Research

What Are Cities Worth? Land Rents, Local Productivity, and the Total Value of Amenities (2016)

Published in The Review of Economics and Statistics (vol. 98, no. 3, pp. 477–487), this paper builds an intercity spatial-equilibrium model that separates land rents from housing costs — a methodological advance over prior studies that used housing costs as a stand-in for land value. Using 2000 U.S. Census data for 276 metropolitan areas, Albouy finds that productivity, not quality of life, explains most cross-city price variation, and that land rents vary enormously: San Francisco has land on average 100 times more valuable per acre than the lowest-value land in McAllen, Texas. A parsimonious set of regressors (population, education, regulation, climate, geography) explains roughly 90% of the variation in trade productivity, land rents, and total amenity value. Critically for the Georgist case, the paper quantifies how value from local productivity and amenities capitalizes partly into land: a doubling of city population raises the total value of local amenities by roughly 1.8% of income, of which about five-ninths is captured in local land values. This directly supports the public investment capitalizes into land outcome, though Albouy studies broad productivity and amenities rather than discrete public-infrastructure projects. The paper contains no discussion of land value taxation or government revenue and does not support the land rent could fund government outcome.

Metropolitan Land Values (2018, with Ehrlich & Shin)

Published in The Review of Economics and Statistics (vol. 100, no. 3, pp. 454–466), this paper constructs the first cross-sectional index of directly observed, transaction-based land values covering 324 U.S. metro areas, using roughly 67,000 actual land-parcel transactions from the CoStar COMPS database (2005–2010). The authors develop a hierarchical Bayesian shrinkage estimator grounded in the monocentric city model to handle geographically nonrandom transaction data. Key findings include:

• Aggregate U.S. urban land value peaked at $30.4 trillion (about 2.2 times nominal GDP) in 2006, falling to $19.1 trillion by 2010 — a roughly 40% decline.
• Five metro areas — New York, Los Angeles, San Francisco, Washington DC, and Chicago — account for 48% of all U.S. urban land value.
• New York's central land value is estimated at roughly $123 million per acre.
• The transaction-based index is systematically higher and more stable than residual-method estimates.

This paper directly supports the land rent could fund government outcome by providing a mainstream, non-Georgist anchor figure for the scale of the U.S. land-value base. It also complicates any simple uniform-rate national LVT vision: the extreme geographic concentration of value means revenue capacity is enormously uneven across the country.

Relation to the Georgist Case

Albouy's work is significant for Georgism not because he advocates it — he does not — but because his rigorous, peer-reviewed empirical research independently confirms two premises central to the Georgist argument:

1. Land value is large. The 2018 paper's finding that U.S. urban land alone exceeded twice GDP at its peak provides a mainstream anchor for revenue-sufficiency arguments, complementing Georgist estimates like Gaffney's and official estimates like Larson's BEA figure.
2. Productivity and amenities capitalize into land. The 2016 paper's quantified finding that local value gains are partly captured in land rents supports the capitalization mechanism underlying the Henry George Theorem and land value capture arguments.

His work also bears on the land cannot be assessed objection: the 2018 paper's sophisticated shrinkage methodology for data-thin metros illustrates how much modeling is required to estimate land value where direct transaction data is sparse.

See Also

• Metropolitan Land Values
• What Are Cities Worth?
• Land Rent Could Fund Government
• Public Investment Capitalizes Into Land
• Tax Capitalization
• Economic Rent

Sources

1. David Albouy (2016), "What Are Cities Worth? Land Rents, Local Productivity, and the Total Value of Amenities," The Review of Economics and Statistics 98(3), 477–487. DOI: 10.1162/REST_a_00550 — used for the Rosen-Roback model, land-rent inference method, variance decomposition findings, and the capitalization-of-amenity-value-into-land result.
2. David Albouy, Gabriel Ehrlich & Minchul Shin (2018), "Metropolitan Land Values," The Review of Economics and Statistics 100(3), 454–466. DOI: 10.1162/rest_a_00710 — used for the transaction-based land-value index, CoStar COMPS methodology, aggregate U.S. urban land value estimates, and the five-metro concentration finding.
3. David Albouy faculty research page. davidalbouy.com — used to confirm author identity, affiliation (University of Illinois and NBER), and access to full-text PDFs.
4. NBER Working Paper No. 14981, "What are Cities Worth? Land Rents, Local Productivity, and the Capitalization of Amenity Values," May 2009. NBER — used for confirming the working-paper history preceding the 2016 publication.

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