The Economic Value of Height and Velocity?

Discussion in 'Business & Economics' started by Carcano, Dec 13, 2012.

  1. Carcano Valued Senior Member

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    Its generally believed in the US that higher speed limits and higher buildings creates lower prices and thus a higher standard of living.

    The reasoning being that getting from point A to point B faster will yield a lower price for whatever is being transported...because there is less time involved and time is money.

    This is true, but driving faster also burns more fuel...according to the laws of aerodynamics.

    Ships on the ocean for example spend less money by slowing down, even though it costs more in crew man hours for a trip across the pacific.

    Higher buildings are supposed to logically lower the cost of office space and thus the retail price of whatever services that office provides.

    But in the real world, does this really add up? Higher office space can actually be more expensive because it commands a better view of the city.

    And we have the example of Munich, one of the wealthiest cities in Europe with very strict laws prohibiting tall structures...as is the case in much of Germany, where urban speed limits are also lower than the States.


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  3. Carcano Valued Senior Member

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    In our society, its remarkable to consider how all urban aesthetic values have been sacrificed to velocity as it were some pagan idol. Everybody wants to race down a highway...but nobody wants to live beside a highway. Velocity equals noise...and noise is perhaps the most significant liability affecting property value. More highways are required...to move people further away from highways.

    There is a story about the founder of Islam and how he refused to enter Damascus because it was so breathtakingly beautiful from a distance. Seeing it up close and personal would have ruined his vision from afar.

    One no can say that about any modern city.
     
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  5. Carcano Valued Senior Member

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    Behold the vicious circle of buildings seeking ever greater heights to acquire better views than their neighbours!


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  7. Nasor Valued Senior Member

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    Highrise buildings are usually only built when realestate is already very expensive. They usually make realestate prices lower than they would otherwise be, because they increase the supply.

    As for higher speeds making things cheaper, I have never actually heard that claim.
     
  8. Read-Only Valued Senior Member

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    Personally, I don't believe the premises stated in the OP are actual OR factual.

    As Nasor said, tall *living space* (as opposed to things like corp. headquarters) are not built in areas where building spaces are cheap.

    And as far as I can tell, faster delivery of *anything* makes it MORE expensive, not less.
     
  9. Carcano Valued Senior Member

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    The legal right to build high forces up the price of land, which in turn forces all buildings to be high...in order to get a return on the investment in land.

    Does office space become cheaper? No, the diagram offered in post #3 indicates that higher spaces cost more for rent or title...with the most expensive being penthouse property.
     
  10. Carcano Valued Senior Member

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    There is such a thing as a three thousand mile salad. If you live in Maine and get your strawberries from California it means somebody was paid to drive those strawberries all the way from the Sunnyvale farm.

    And that somebody gets paid by the hour...on the other hand, he saves fuel costs if he drives slower.

    http://www.telegraph.co.uk/news/210...er-driving-can-save-motorists-500-a-year.html

    "Research commissioned by What Car magazine has challenged the popular idea that a car is most efficient at speeds between 50 and 60 mph.

    Tests on five different cars ranging in size from a 1 litre Toyota Aygo to a 2.2 litre Land Rover Freelander found that the most efficient speed was below 40 mph for all five and as low as 20 mph for two.

    Above 40 mph, fuel consumption rose sharply and by 90 mph the average miles-per-gallon had halved."
     
  11. Read-Only Valued Senior Member

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    Which supports exactly what I said - faster delivery is MORE expensive - and defeats your original statement that it makes it cheaper.

    Can you not make up your mind?

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  12. Carcano Valued Senior Member

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    Lets look at that original statement..."Its generally believed in the US that higher speed limits and higher buildings creates lower prices and thus a higher standard of living."

    It very much depends on the price of fuel...here's a concrete example.

    An 18 wheel truck gets an average of 7mpg and travels an average of 70mph and is driven by someone making 30 dollars an hour.

    This means a trip of 700 miles costs 300 dollars in labour and 300 dollars in fuel...at 3 dollars per gallon.

    If the price was 2 dollars a gallon then driving faster will yield lower prices to the consumer...because the savings in time/labour will outweigh the rise in fuel costs.

    However, if the price of fuel is 5 dollars a gallon, driving faster becomes a liability to the final retail price of strawberries from California or whatever is being transported.
     

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