American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Gibrat's Law for (All) Cities: Comment
American Economic Review
vol. 99,
no. 4, September 2009
(pp. 1672–75)
Abstract
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)Citation
Levy, Moshe. 2009. "Gibrat's Law for (All) Cities: Comment." American Economic Review, 99 (4): 1672–75. DOI: 10.1257/aer.99.4.1672Additional Materials
JEL Classification
- R11 Regional Economic Activity: Growth, Development, and Changes
- R12 Size and Spatial Distributions of Regional Economic Activity
- R23 Urban, Rural, and Regional Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics