Gibrat's Law for (All) Cities: Comment
Jan Eeckhout (2004) reports that the empirical city size distribution is lognormal, consistent with Gibrat's Law. We show that for the top 0.6 percent of the largest cities, the empirical distribution is dramatically different from the lognormal, and follows a power law. This top part is extremely important as it accounts for more than 23 percent of the population. The empirical hybrid lognormal-power-law distribution revealed may be characteristic of other key distributions, such as the wealth distribution and the income distribution. This distribution is not consistent with a simple Gibrat proportionate effect process, and its origin presents a puzzle yet to be answered. (JEL R11, R12, R23)
Volume (Year): 99 (2009)
Issue (Month): 4 (September)
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- Eaton, Jonathan & Eckstein, Zvi, 1997.
"Cities and growth: Theory and evidence from France and Japan,"
Regional Science and Urban Economics,
Elsevier, vol. 27(4-5), pages 443-474, August.
- Jonathan Eaton & Zvi Eckstein, 1994. "Cities and Growth: Theory and Evidence from France and Japan," NBER Working Papers 4612, National Bureau of Economic Research, Inc.
- 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.
- Edward L. Glaeser, 1998. "Are Cities Dying?," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 139-160, Spring.
- Jan Eeckhout, 2004. "Gibrat's Law for (All) Cities," American Economic Review, American Economic Association, vol. 94(5), pages 1429-1451, December.
- Levy, Moshe, 2003. "Are rich people smarter?," Journal of Economic Theory, Elsevier, vol. 110(1), pages 42-64, May.
- Xavier Gabaix, 1999. "Zipf's Law for Cities: An Explanation," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 739-767. Full references (including those not matched with items on IDEAS)
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