Zipf’s law and South African towns

An important question has exercised the minds of many economist over time: why are there differences in the sizes of different towns? For instance, why are all towns in a region not of equal size? The answer has to do with power laws.

There is no Hobbesian significance in the word ‘power’ – it is just a mathematical term. If the value of some quantity q depends on the value of another quantity x according to a power-law relationship, this means that each time x is doubled, y increases by some constant factor (Ball, 2005).

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Of people and enterprises in South African towns

Western CapeOrderliness in enterprise development in South African towns has been observed as statistically significant correlations between different characteristics of South African towns. One of the first correlations noted was a statistically significant positive relationship between the population of South African towns and the number of their enterprises. This was observed in the Free State, the Northern Cape, the Western Cape (see graph) and the Gouritz Cluster Biosphere Reserve. In fact, towns in the Eastern Cape Karoo exhibited such relationships over a period of a century. One can conclude the relationship is ubiquitous in South Africa. Continue reading “Of people and enterprises in South African towns”

A tribute to Eric Beinhocker

Eric Beinhocker

On an early morning walk years ago a friend told me about Eric Beinhocker’s book, The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. In a review of the book, William Grassie said: “The genius of the book is Eric Beinhocker’s grand synthesis of diverse fields of research, including physics, evolutionary biology, anthropology, psychology, game theory, information theory, and economic history, all to tell the big story about why traditional neo-classical economic theory fails, and how “Complexity Economics” works.”

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