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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
Article

Abstract

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.

Keywords

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

JEL

O30 O40 

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Copyright information

© Japan Association for Evolutionary Economics 2004

Authors and Affiliations

  1. 1.Department of Business StudiesAalborg UniversityAalborgDenmark

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