Zipf’s Law and the Gibrat’s Law: What Do the Facts Have to Say about the Brazilian Cities?

Wellington Ribeiro Justo^1,

¹Department of Economics, Regional University of Cariri (URCA), Crato (CE), Brazil

Cite this paper:
Wellington Ribeiro Justo. Zipf’s Law and the Gibrat’s Law: What Do the Facts Have to Say about the Brazilian Cities?. Journal of Finance and Economics. 2014; 2(5):136-144. doi: 10.12691/jfe-2-5-1

Abstract

Despite attempts to relate the economic theory with the statistical data, the theory is usually sufficiently clear, supplying simple and well-defined forecasts, whilst the real world tends to produce complicated and disorganized results. However, with reference to models on the distribution of city sizes the inverse occurs. That is; the data, surprisingly offers a sufficiently clear picture with high degrees of difficulty of being reproduced theoretically. This work aims at verifying whether two of the most well known and intriguing phenomena, Zipf's Law and Gibrat's Law, occur in Brazil, and also to make a theoretical analysis of such phenomena. The study uses the Brazilian demographic census data of 1970, 1980, 1991 and 2000 and the 1996 population counting. The results confirm that these empirical regularities indeed occur in the distribution of the Brazilian cities.

Keywords:
Gibrat’s law New Economic Geography the distribution of city sizes Zipf’s law

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