CENTRAL PLACE T HEORY A ND CITY SIZE DISTRIBUTION

By Wen-Tai Hsu. 2012

174 citations recorded by the source corpus.

This article proposes a theory of city size distribution via a hierarchy approach rather than the popular random growth process. It does so by formalising central place theory using an equilibrium entry model and specifying the conditions under which city size distribution follows a power law. The force driving the city size differences in this model is the heterogeneity in economies of scale across goods. The city size distribution under a central place hierarchy exhibits a power law if the distribution of scale economies is regularly varying, which is a general class that encompasses many wellknown, commonly used distributions. The difference between a high-order metropolis like Chicago and a lowerorder town like Peoria or Burlington was not merely Chicago’s much larger population. Chicago’s high rank meant that its market attracted customers for many more goods and services from a much wider region ... Just as one can rank human settlements according to the number of people who live in them, so can one rank all economic goods according to the number of people and concentrations of wealth needed to create a market for them. The hierarchy of urban settlements is also a hierarchy of markets. (Cronon, 1991, pp. 279–80). City size distribution is highly skewed and heavy-tailed: there are many more small cities than there are large cities, and the distribution can be approximated by the power law, a.k.a., the Pareto distribution, with a tail index of around one. If the tail index is exactly one, then the distribution is called Zipf’s law (following Zipf, 1949) or the rank-size rule, because the product of the rank and size of a city is a constant.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/a03b4d4c0f69a78370bbf8ad60c6a1deba13f830

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In Economics and Econometrics

Citations in the corpus

Cities and product variety: evidence from restaurants (2015, background): “Hsu (2012) finds a similar pattern in US data and proposes a model of Central Place Theory consistent with these regularities.”
Productive Cities: Sorting, Selection, and Agglomeration (2014, background): “1 (s−s)(t−t) ln ( st φ ) if ts ≤ φ ≤ ts (43)”
The city size distribution debate: Resolution for US urban regions and megalopolitan areas (2012, background): “7 Following on a suggestion by Berry and Garrison (1958), Hsu (2010) begins with central place theory as an equilibrium entry model and identifies the conditions under which a hierarchical city size distribution will follow a power law. ize distribution debate: Resolution for US urban regions and…”
What Can Be Learned from Spatial Economics? (2019, unknown): “A considerable effort has been made to explain the Zipf law (see, e.g., Gabaix 1999; Eeckhout 2004; Hsu 2012; Behrens, Duranton, and Robert-Nicoud 2014).”
The Growth of Cities (2013, unknown): “Hsu (2012) proposes a microfounded model of central place theory which can generate Zipf’s law.”