Tim Harford poses a question, perhaps we can answer it?
Just wanted to ask if there is an economic explanation for the fact that real estate in cities in third world countries like India is often more expensive than in cities in the US. (Except for New York,and a few cities in California.)
I did not have a satisfactory answer, except to wonder whether it is really true that real estate in third world cities is more expensive than in developed-world cities.
I personally think that it is partially true. And that this is because of a combination of factors. Obviously land is scarce (also via artificial controls), connecting infrastructure is not great, population is dense and there is too much money chasing the available land. Add the complications of rent and land controls in place in many of our cities and perhaps you have the answer.