Quantitative Economics: Nov, 2018, Volume 9, Issue 3

A scale‐free transportation network explains the city‐size distribution

Marcus Berliant, Axel H. Watanabe

Zipf's law is one of the best known empirical regularities in urban economics. There is extensive research on the subject, where each city is treated symmetrically in terms of the cost of transactions with other cities. Recent developments in network theory facilitate the examination of an asymmetric transport network. In a scale‐free network, the chance of observing extremes in network connections becomes higher than the Gaussian distribution predicts and, therefore, it explains the emergence of large clusters. The city‐size distribution shares the same pattern. This paper decodes how accessibility of a city to other cities on the transportation network can boost its local economy and explains the city‐size distribution as a result of its underlying transportation network structure. We confirm our model predictions with US and Belgian data. Finally, we discuss the endogenous evolution of transport networks.
Zipf's law city‐size distribution scale‐free network L14 R12 R40

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