New Evidence on Gibrat’s Law for Cities

González-Val, Rafael and Lanaspa, Luis and Sanz, Fernando (2008): New Evidence on Gibrat’s Law for Cities.

Abstract

The aim of this work is to test empirically the validity of Gibrat’s Law in the growth of cities, using data for all the twentieth century of the complete distribution of cities (without any size restrictions) in three countries: the US, Spain and Italy. On considering the distribution of cities, we find a tendency to divergence. However, this fact does not impede, whether from an empirical or a theoretical point of view, that city size distribution can be adequately approximated with a lognormal distribution. Also, the conclusions which can be obtained as to fulfilment or not of Gibrat’s Law depend, first, on the sample size and, second, on the size of the cities being considered (large or small), which means that the results of any study which does not use all the distribution will be relative.

• Item Type: MPRA Paper
• Language: English
• Keywords: Gibrat’s Law; city size distribution; urban growth
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R0 - General > R00 - General

References

Anderson, Gordon, and Ying Ge. 2005. The Size Distribution of Chinese Cities. Regional Science and Urban Economics, 35: 756-776.

Azagra, Joaquín, Pilar Chorén, Francisco J. Goerlich, and Matilde Mas. 2006. La localización de la población española sobre el territorio. Un siglo de cambios: un estudio basado en series homogéneas (1900-2001). Fundación BBVA.

Black, Duncan, and Vernon Henderson. 2003. Urban Evolution in the USA. Journal of Economic Geography, 3: 343-372.

Bosker, Maarten, Steven Brakman, Harry Garretsen, and Marc Schramm. 2006. A Century of Shocks: the Evolution of the German City Size Distribution 1925 – 1999. CESifo working paper 1728.

Brakman, Steven, Harry Garretsen, and Marc Schramm. 2004. The Strategic Bombing of German Cities during World War II and its Impact on City Growth. Journal of Economic Geography, 4: 201-218.

Cheshire, Paul C., and Stefano Magrini. 2004. Population Growth in European Cities: Weather Matters- but only Nationally. Regional Studies, 40(1): 23-37.

Clark, J. Stephen, and Jack C. Stabler. 1991. Gibrat's Law and the Growth of Canadian Cities. Urban Studies, 28(4): 635-639.

Córdoba, Juan C. Forthcoming. A generalized Gibrat’s Law for Cities. International Economic Review.

Davis, Donald R., and David E. Weinstein. 2002. Bones, Bombs, and Break Points: The Geography of Economic Activity. American Economic Review, 92(5): 1269-1289.

Duranton, Gilles. 2006. Some Foundations for Zipf´s Law: Product Proliferation and Local Spillovers. Regional Science and Urban Economics, 36: 542-563.

Duranton, Gilles. 2007. Urban Evolutions: The Fast, the Slow, and the Still. American Economic Review, 97(1): 197-221.

Eaton, Jonathan, and Zvi Eckstein. 1997. Cities and Growth: Theory and Evidence from France and Japan. Regional Science and Urban Economics, 27(4–5): 443–474.

Eeckhout, Jan. 2004. Gibrat's Law for (All) Cities. American Economic Review, 94(5): 1429-1451.

Eeckhout, Jan. Forthcoming. Gibrat’s Law for (all) Cities: Reply. American Economic Review.

Gabaix, Xavier. 1999. Zipf’s Law for Cities: An Explanation. Quaterly Journal of Economics, 114(3): 739-767.

Gabaix, Xavier, and Yannis M. Ioannides. 2004. The Evolution of City Size Distributions. In Handbook of Urban and Regional Economics, vol. 4, ed. John V. Henderson and Jean. F. Thisse, 2341-2378. Amsterdam: Elsevier Science, North-Holland.

Gibrat, Robert. 1931. Les Inégalités Économiques. París: Librairie du Recueil Sirey.

Glaeser, Edward L., and Jesse M. Shapiro. 2002. Cities and Warfare: The Impact of Terrorism on Urban Form. Journal of Urban Economics, 51: 205-224.

González-Val, Rafael. 2008. The Evolution of the US Urban Structure from a Long-run Perspective (1900-2000). http://mpra.ub.uni-muenchen.de/9732/1/MPRA_paper_9732.pdf.

Guérin-Pace, France. 1995. Rank-Size Distribution and the Process of Urban Growth. Urban Studies, 32(3): 551-562.

Härdle, Wolfgang. 1990. Applied Nonparametric Regression. In Econometric Society Monographs. Cambridge, New York and Melbourne: Cambridge University Press.

Ioannides, Yannis M., and Henry G. Overman. 2003. Zipf’s Law for Cities: an Empirical Examination. Regional Science and Urban Economics, 33: 127-137.

Kalecki, Michael. 1945. On the Gibrat Distribution. Econometrica, 13(2): 161-70.

Levy, Moshe. Forthcoming. Gibrat’s Law for (all) Cities: A Comment. American Economic Review.

Parr, John B., and Keisuke Suzuki. 1973. Settlement Populations and the Lognormal Distribution. Urban Studies, 10: 335-352.

Petrakos, George, Prodromos Mardakis, and Helen Caraveli. 2000. Recent Developments in the Greek System of Urban Centres. Environment and Planning B: Planning and Design, 27(2): 169-181.

Resende, Marcelo. 2004. Gibrat’s Law and the Growth of Cities in Brazil: A Panel Data Investigation. Urban Studies, 41(8): 1537-1549.

Santarelli, Enrico, Luuk Klomp, and Roy Thurik. 2006. Gibrat's Law: An Overview of the Empirical Literature. In Entrepreneurship, Growth, and Innovation: the Dynamics of Firms and Industries, ed. Enrico Santarelli, 41-73. New York: Springer.

Soo, Kwok T. 2007. Zipf's Law and Urban Growth in Malaysia. Urban Studies, 44(1): 1-14.

Sutton, John. 1997. Gibrat's Legacy. Journal of Economic Literature. 35(1): 40-59.

White, Halbert. 1980. A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity. Econometrica, 48: 817-38.

Zipf, George. 1949. Human Behaviour and the Principle of Least Effort, Cambridge, MA: Addison-Wesley.