American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
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