The forgotten discovery of gravity models and the inefficiency of early railway networks Andrew Odlyzko School of Mathematics University of Minnesota Minneapolis, MN 55455, USA
[email protected] http://www.dtc.umn.edu/∼odlyzko Revised version, April 19, 2015 Abstract. The routes of early railways around the world were generally inef- ficient because of the incorrect assumption that long distance travel between major cities would dominate. Modern planners rely on methods such as the “gravity models of spatial interaction,” which show quantitatively the impor- tance of accommodating travel demands between smaller cities. Such models were not used in the 19th century. This paper shows that gravity models were discovered in 1846, a dozen years earlier than had been known previously. That discovery was published during the great Railway Mania in Britain. Had the validity and value of gravity models been recognized properly, the investment losses of that gigantic bubble could have been lessened, and more efficient rail systems in Britain and many other countries would have been built. This incident shows society’s early encounter with the “Big Data” of the day and the slow diffusion of economically significant information. The results of this study suggest that it will be increasingly feasible to use modern network science to analyze information dissemination in the 19th century. That might assist in understanding the diffusion of technologies and the origins of bubbles. Keywords: gravity models, railway planning, diffusion of information JEL classification codes: D8, L9, N7 1 Introduction Dramatic innovations in transportation or communication frequently produce predictions that distance is becoming irrelevant. In recent decades, two popular books in this genre introduced the concepts of “death of distance” [7] and “the Earth is flat” [25].