Gibrat's Law for (All) Cities: Reply
American Economic Review
vol. 99,
no. 4, September 2009
(pp. 1676-83)
Abstract
This reply refutes the objection raised by Levy (2009) about the fit of the upper tail of the city size distribution in Eeckhout (2004). I show that the method on which his conclusion is based is unsubstantiated. The visual interpretation of the fit on log-log plots is misleading. In addition, the methodology used to estimate a truncated subsample of the distribution while testing its significance against a distribution with prespecified parameters is ill-founded. The main conclusion is that Gibrat's law holds: city sizes follow proportionate growth, thus giving rise to a lognormal size distribution, tail included. (JEL R11, R12, R23)Citation
Eeckhout, Jan. 2009. "Gibrat's Law for (All) Cities: Reply." American Economic Review, 99 (4): 1676-83. DOI: 10.1257/aer.99.4.1676Additional 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