Discussion paper

DP18851 High-Rise Housing and Urban Sustainability

This paper investigates the impact of social interactions on housing investment decisions using comprehensive longitudinal micro-level data from the entire Swedish population and sales data detailing the physical attributes of the nation’s housing stock. The primary objective is to understand how social contacts influenced families’ decisions to purchase apartments in high-rise buildings between 2012 and 2020, as opposed to other nearby,
similar, and affordable housing options following relocation. The study uncovers compelling evidence that social contacts influence individuals’ choices regarding high-rise living. In particular, having a peer that already lives in a high-rise increases by more than 50 percent the propensity to purchase an apartment into a high-rise building in a given area. This suggests that information obtained through social networks positively shapes preferences
for high-rise apartments, mitigating concerns about changes in living habits. The results show the importance of considering social dynamics in urban development strategies and policy making aimed at fostering sustainable and efficient housing choices.


kyriakopoulou, E, T Lu, E Patacchini and J Strale (2024), ‘DP18851 High-Rise Housing and Urban Sustainability‘, CEPR Discussion Paper No. 18851. CEPR Press, Paris & London. https://cepr.org/publications/dp18851