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

Yannis Ioannides and Spyros Skouras ()

No 740, Discussion Papers Series, Department of Economics, Tufts University from Department of Economics, Tufts University

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.

Keywords: Gibrat's Law; Zipf's law; upper tail; mixture of distributions; switching regressions; urban evolution; urban heirarchy (search for similar items in EconPapers)
JEL-codes: C24 D30 D51 J61 R12 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (16)

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Persistent link: https://EconPapers.repec.org/RePEc:tuf:tuftec:0740

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