Seminar: Gravity Models, Information Flows, and Inefficiency of Early Railroad Networks

History of Science, Technology, and Medicine – Spring Colloquium 2015

Friday January 30 at 3:35 p.m. in room 131 of the Tate Laboratory of Physics on the Minneapolis campus of the University of Minnesota (refreshments at 3:15 p.m. in Room 216).

“Gravity Models, Information Flows, and Inefficiency of Early Railroad Networks”

Andrew Odlyzko, School of Mathematics, University of Minnesota

ABSTRACT: Gravity models of spatial interaction, which provide quantitative estimates of the decline in intensity of economic and social interactions with distance, are now ubiquitous in urban and transportation planning, international trade, and many other areas. They were discovered through analysis of a unique large data set by a Belgian engineer in 1846, at the height of the British Railway Mania. They contradicted deeply embedded beliefs about the nature of demand for railway service, and had they been properly applied, they could have lessened the investment losses of that bubble. A study of the information flows in Britain, primarily in the newspaper press, provides an instructive picture of slow diffusion of significant factual information, the distortions it suffered, and the wrong conclusions that were drawn from the experience in the end.