Relative height and vertical status in buildings

Abstract Motivated by research that associates higher positioning with well‐being, we expand the vertical price‐gradient literature by estimating the value of within‐ and between‐building “vertical status”: one's relative vertical position compared to others in the same building and in neighboring buildings, respectively. Employing an extensive dataset of condominium transactions in mid‐ and high‐rise residential buildings in Vancouver, Canada, we document a substantial vertical status (VS) premium. Controlling for a unit's absolute height, the view from the unit's floor, and other unit‐ and building‐level characteristics, we find that the within‐building VS premium ranges between 4.4% and 6.7% of average unit price. Furthermore, for a unit above all nearby buildings compared to the one below all neighboring structures, the between‐building VS contributes an additional 2.4%–4.4% of average unit price. We also show that individuals place greater weight on the disutility of being below others than on the utility of being above them. Finally, we find that the marginal premium associated with VS increases with relative vertical position within a building, suggesting within‐building sorting by preference for status. Together, these findings highlight the importance of vertical relative positioning in shaping housing preferences and valuation in the urban space.