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Gibrat's Law for (All) Cities: A Rejoinder

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  • Yannis M. Ioannides
  • Spyros Skouras

Abstract

We establish that the debate between Eeckhout (2004; 2009) and Levy (2009) has still not resolved the key issue of whether the distribution of large US urban places in 2000 is consistent with a lognormal for the intire size range. We resolve this by introducing a new distribution function which switches between a lognormal and a power distribution and estimating it with the data used by Eeckhout and Levy (2009). We find that there is a sudden transition from lognormality to power behavior as city populations icrease above sudden transition from lognormality to power behavior as city populations increase above 100,000. Gibrat's law holds for most cities but a power law holds for most of the population.

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File URL: http://ase.tufts.edu/econ/research/documents/2009/ioannidesGibratsLaw.pdf
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Bibliographic Info

Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0740.

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Date of creation: 2009
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Handle: RePEc:tuf:tuftec:0740

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Related research

Keywords: Gibrat's Law; Zipf's law; upper tail; mixture of distributions; switching regressions; urban evolution; urban heirarchy;

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Cited by:
  1. Kristian Giesen & Jens Suedekum, 2012. "The Size Distribution across all "Cities": A Unifying Approach," CESifo Working Paper Series 3730, CESifo Group Munich.
  2. Ferdinand Rauch, 2013. "Cities as Spatial Clusters," Economics Series Working Papers 656, University of Oxford, Department of Economics.
  3. Hernán D. Rozenfeld & Diego Rybski & Xavier Gabaix & Hernán A. Makse, 2009. "The Area and Population of Cities: New Insights from a Different Perspective on Cities," NBER Working Papers 15409, National Bureau of Economic Research, Inc.
  4. Rafael GONZÀLEZ-VAL, 2012. "Zipf’S Law: Main Issues In Empirical Work," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 36, pages 147-164.
  5. Rafael González-Val & Arturo Ramos-Gutiérrez & Fernando Sanz-Gracia, 2011. "Size Distributions for All Cities: Lognormal and q-exponential functions," ERSA conference papers ersa11p554, European Regional Science Association.
  6. Giesen, Kristian & Zimmermann, Arndt & Suedekum, Jens, 2010. "The size distribution across all cities - Double Pareto lognormal strikes," Journal of Urban Economics, Elsevier, vol. 68(2), pages 129-137, September.
  7. González-Val, Rafael & Ramos, Arturo & Sanz-Gracia, Fernando, 2010. "On the best functions to describe city size distributions," MPRA Paper 21921, University Library of Munich, Germany.
  8. Kristian GIESEN & Jens SÜDEKUM, 2012. "The French Overall City Size Distribution," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 36, pages 107-126.

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