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Gibrat’s law for cities, growth regressions and sample size

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  • González-Val, Rafael
  • Lanaspa, Luis
  • Sanz, Fernando

Abstract

This paper uses un-truncated city population data from six countries (the United States, Spain, Italy, France, England and Japan) to illustrate how parametric growth regressions can lead to biased results when testing for Gibrat’s law in city size distributions. The OLS results show non-monotonic behaviours depending on the sample size. Moreover, it is possible to find a critical sample size from which we reject Gibrat’s law.

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File URL: http://mpra.ub.uni-muenchen.de/42615/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42615.

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Date of creation: Nov 2012
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Handle: RePEc:pra:mprapa:42615

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Keywords: Gibrat’s law; city size distribution; urban growth;

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  1. Rafael González-Val & Luis Lanaspa & Fernando Sanz, 2012. "New evidence on Gibrat’s law for cities," Working Papers 2012/18, Institut d'Economia de Barcelona (IEB).
  2. Xavier Gabaix & Yannis M. Ioannides, 2003. "The Evolution of City Size Distributions," Discussion Papers Series, Department of Economics, Tufts University 0310, Department of Economics, Tufts University.
  3. Jonathan Eaton & Zvi Eckstein, 1994. "Cities and Growth: Theory and Evidence from france and Japan," Boston University - Institute for Economic Development 36, Boston University, Institute for Economic Development.
  4. Jan Eeckhout, 2004. "Gibrat's Law for (All) Cities," American Economic Review, American Economic Association, vol. 94(5), pages 1429-1451, December.
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