Gibrat's Law for (All) Cities: A Rejoinder
AbstractWe 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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Bibliographic InfoPaper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0740.
Date of creation: 2009
Date of revision:
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Gibrat's Law; Zipf's law; upper tail; mixture of distributions; switching regressions; urban evolution; urban heirarchy;
Find related papers by JEL classification:
- D30 - Microeconomics - - Distribution - - - General
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-10-24 (All new papers)
- NEP-GEO-2009-10-24 (Economic Geography)
- NEP-URE-2009-10-24 (Urban & Real Estate Economics)
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