Evolutionary and Institutional Economics Review

, Volume 1, Issue 1, pp 127–148 | Cite as

Population Thinking, Price’s Equation and the Analysis of Economic Evolution

  • Esben Sloth Andersen


In this paper it is argued that evolutionary economics needs general statistical tools for performing the analysis of the aggregate effects of evolution in terms of the underlying population dynamics. These tools have been developed within biometrics, and they have recently become directly applicable to economic evolution due to the development of what may be called a general evometrics. Central to this evometrics is a method for partitioning evolutionary change developed by George Price into the selection effect and what may be called the innovation effect. This method serves surprisingly well as a means of accounting for evolution and as a starting point for the explanation of evolution. The applications of Price’s equation cover the partitioning and analysis of relatively short-term evolutionary change within individual industries as well as the study of more complexly structured populations of firms. By extrapolating these applications of Price’s evometrics, the paper suggests that his approach may play a central role in the emerging evolutionary econometrics.


population thinking statistical analysis of economic evolution Price’s equation multi-level selection 


O30 O40 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Andersen, E. S. (2002) “Railroadization as Schumpeter’s standard example of capitalist evolution: An evolutionary-ecological interpretation,” Industry and Innovation 9: 41–78.CrossRefGoogle Scholar
  2. Axelrod, R. (1990) The Evolution of Cooperation, reprint edn., Penguin, London.Google Scholar
  3. - (1997) The Complexity of Cooperation, Princeton University Press, Princeton, N.J.Google Scholar
  4. - and W. D. Hamilton (1981) “The evolution of cooperation,” Science 211: 1390–1396.CrossRefGoogle Scholar
  5. Bartelsman, E. J. and M. Doms (2000) “Understanding productivity: Lessons from longitudinal microdata,” Journal of Economic Literature 38: 569–594.CrossRefGoogle Scholar
  6. Boyd, R., H. Gintis, S. Bowles and P. J. Richerson (2003) “The evolution of altruistic punishment,” Proceedings of the National Academy of Sciences 100: 3531–3535.CrossRefGoogle Scholar
  7. Dopfer, K. (ed) (2001) Evolutionary Economics: Program and Scope, Kluwer, Boston, Mass.CrossRefGoogle Scholar
  8. Fisher, R. A. (1999) The Genetical Theory of Natural Selection: A Complete Variorum Edition, Oxford University Press, Oxford.Google Scholar
  9. Foster, J. and J. S. Metcalfe (eds) (2001) Frontiers of Evolutionary Economics: Competition, Self-Organization and Innovation Policy, Elgar, Cheltenham and Northampton, Mass.CrossRefGoogle Scholar
  10. Frank, S. A. (1995) “George Price’s contributions to evolutionary genetics,” Journal of Theoretical Biology 175: 373–388.CrossRefGoogle Scholar
  11. - (1997) “The Price equation, Fisher’s fundamental theorem, kin selection, and causal analysis,” Evolution 51: 1712–1729.CrossRefGoogle Scholar
  12. - (1998) Foundations of Social Evolution, Princeton University Press, Princeton, N.J.Google Scholar
  13. Freeman, C. and F. Louca (2001) As Time Goes By: From the Industrial Revolutions to the Information Revolution, Oxford University Press, Oxford.Google Scholar
  14. Gifford, A. (2000) “The bioeconomics of cooperation,” Journal of Bioeconomics 2: 153–168.CrossRefGoogle Scholar
  15. Gintis, H. (2000) Game Theory Evolving: A Problem-Centered Introduction to Modelling Strategic Behavior, Princeton University Press, Princeton, N.J.Google Scholar
  16. Hamilton, W. D. (1996) The Narrow Roads of Gene Land: The Collected Papers of W. D. Hamilton, Freeman, Oxford.Google Scholar
  17. Henrich, J. (2004) “Cultural group selection, coevolutionary processes and large-scale cooperation,” Journal of Economic Behavior and Organization 53: 3–36.CrossRefGoogle Scholar
  18. Knudsen, T. (2002) “Economic selection theory,” Journal of Evolutionary Economics 12: 443–470.CrossRefGoogle Scholar
  19. - (2004) “General selection theory and economic evolution: The Price equation and the genotype/phenotype distinction,” forthcoming in Journal of Economic Methodology.Google Scholar
  20. MacArthur, R. H. and E. O. Wilson (2001) The Theory of Island Biogeography, reprint edn., Princeton University Press, Princeton, N.J. and Oxford.Google Scholar
  21. Malerba, F., R. R. Nelson, L. Orsenigo and S. G. Winter (1999) “‘History-friendly’ models of industry evolution: The computer industry,” Industrial and Corporate Change 8: 1–36.CrossRefGoogle Scholar
  22. Marshall, A. (1949) Principles of Economics: An Introductory Volume, reprint of the 8th edn., Macmillan, Basingstoke and London.Google Scholar
  23. Maynard, S. J. (1982) Evolution and the theory of games, Cambridge University Press, Cambridge.Google Scholar
  24. Maynard, S. J. and G. R. Price (1973) “The logic of animal conflict,” Nature 245: 15–18.CrossRefGoogle Scholar
  25. Malerba, F., R. R. Nelson, L. Orsenigo and S. G. Winter (1999) “‘History-friendly’ models of industry evolution: The computer industry,” Industrial and Corporate Change 8: 1–36.CrossRefGoogle Scholar
  26. Metcalfe, J. S. (1994) “Competition, Fisher’s Principle and Increasing Returns in the Selection Process,” Journal of Evolutionary Economics 4: 327–346.CrossRefGoogle Scholar
  27. - (1998) Evolutionary Economics and Creative Destruction, Routledge, London and New York.CrossRefGoogle Scholar
  28. - (2001) “Evolutionary approaches to population thinking and the problem of growth and development,” in K. Dopfer (ed) Evolutionary Economics: Program and Scope, Kluwer, Boston, Mass.Google Scholar
  29. Metcalfe, J. S. (2002) “Book review: Steven A. Frank. 1998. Foundations of Social Evolution”, Journal of Bioeconomics 4: 89–91.CrossRefGoogle Scholar
  30. Nelson, R. R. (1995) “Recent evolutionary theorizing about economic change,” Journal of Economic Literature 33: 48–90.Google Scholar
  31. Nelson, R. R. and S. G. Winter (1982) An Evolutionary Theory of Economic Change, Belknap/Harvard University Press, Cambridge, Mass. and London.Google Scholar
  32. Page, K. M. and M. A. Nowak (2002) “Unifying evolutionary dynamics,” Journal of Theoretical Biology 219: 93–98.CrossRefGoogle Scholar
  33. Price, G. R. (1970) “Selection and covariance,” Nature 227: 520–521.CrossRefGoogle Scholar
  34. - (1972a) “Extension of covariance selection mathematics,” Annals of Human Genetics 35: 485–490.CrossRefGoogle Scholar
  35. - (1972b) “Fisher’s ‘fundamental theorem’ made clear,” Annals of Human Genetics 36: 129–140.CrossRefGoogle Scholar
  36. - (1995) “The nature of selection,” Journal of Theoretical Biology 175: 389–396.CrossRefGoogle Scholar
  37. Schumpeter, J. A. (1939) Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, McGraw-Hill, New York and London.Google Scholar
  38. - (1954) History of Economic Analysis, (ed. E. B. Schumpeter), Allen and Unwin, London.Google Scholar

Copyright information

© Japan Association for Evolutionary Economics 2004

Authors and Affiliations

  1. 1.Department of Business StudiesAalborg UniversityAalborgDenmark

Personalised recommendations