US city size distribution revisited: Theory and empirical evidence

Ramos, Arturo and Sanz-Gracia, Fernando (2015): US city size distribution revisited: Theory and empirical evidence.

Abstract

We have developed an urban economic model in which a social planner maximizes the net output of the whole system of cities in a country in such a way that agents locate themselves in cities of different sizes. From this model we derive the new “threshold double Pareto Generalized Beta of the second kind”. In order to test the theory empirically, we have analysed the US urban system and have considered two types of data (incorporated places from 1900 to 2000 and all places in 2000 and 2010). The results are encouraging because the new distribution always outperforms the lognormal and the double Pareto lognormal. The results are robust to a number of different criteria. Thus, the new density function describes accurately the US city size distribution and, therefore, tends to support the validity of the theoretical model.

• Item Type: MPRA Paper
• Language: English
• Keywords: human capital; congestion costs; lower tail, body, and upper tail; Pareto and Generalized Beta of the second kind distributions
• Subjects: C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C46 - Specific Distributions ; Specific Statistics; D - Microeconomics > D3 - Distribution > D39 - Other; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity

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