Knowledge that Transforms

THIS IS A STUDY OF THE CONSUMPTION OF AUTOMOBILES IN THE UNITED STATES DURING THE PERIOD 1955-57. DEPRECIATION IS USED AS THE PRIMARY MEASURE OF CONSUMPTION IN ORDER TO DETERMINE HOW WELL DEMAND MEASURED IN THIS WAY CAN BE EXPLAINED BY INCOME AND OTHER SOCIAL AND DEMOGRAPHIC VARIABLES. THIS STUDY DIFFERS FROM EARLIER WORK IN THREE RESPECTS: THE LIMITED DEPENDENT VARIABLE MODEL DEVELOPED BY TOBIN IS USED IN ORDER TO HANDLE CORRECTLY THE PROBLEM OF ZERO EXPENDITURE HOUSEHOLDS. THE DATA USED ARE DRAWN FROM THE SURVEYS OF CONSUMER FINANCES FOR THE YEARS 1955, 1956, AND 1957. THE ESTIMATES FOR EACH OF THE YEARS ARE COMPARED AND APPEAR TO BE REASONABLY CONSISTENT. A REPAIR COST BASED ON THE AGE OF EACH CAR IS INCLUDED IN THE TOTAL COST INCURRED BY THE HOUSEHOLD. THE CONCLUSIONS ARE THAT: (1) HOUSEHOLD CONSUMPTION RISES WITH INCOME, BUT RISES LESS SHARPLY AT HIGHER THAN AT LOWER INCOMES, (2) EXPENDITURE DECREASES AS THE HEAD OF THE HOUSEHOLD APPROACHES RETIREMENT AGE, (3) EXPENDITURE INCREASES AS THE NUMBER OF ADULTS IN THE SPENDING UNIT INCREASES, (4) EXPENDITURE DECREASES AS THE NUMBER OF CHILDREN INCREASES, (5) AFTER ADJUSTMENT FOR OTHER FACTORS, SPENDING UNITS LIVING IN NEW YORK AND CHICAGO SHOW LOWER THAN AVERAGE, AND THOSE LIVING IN RURAL AREAS SHOW HIGHER THAN AVERAGE CONSUMPTION, (6) NONWHITE SPENDING UNITS CONSUME CARS AT A LOWER LEVEL THAN WHITE. /AUTHOR/

EXTENSIVE GEOGRAPHIC GROWTH OF METROPOLITAN REGIONS, EMPLOYMENT AND POPULATION DECLINE IN CENTRAL AREAS, AND LOW DENSITY DEVELOPMENT, PARTICULARLY RESIDENTIAL, ARE PERHAPS THE MOST NOTABLE DIMENSIONS OF THE TRANSFORMATION EXPERIENCED IN U. S. METROPOLITAN AREAS SINCE WORLD WAR II. NEW AND CONSISTENT INFORMATION IS PRESENTED ABOUT THE INTERRELATIONSHIP BETWEEN RESIDENTIAL DENSITY AND AUTOMOBILE OWNERSHIP. REGARDLESS WHICH CASUAL HYPOTHESIS IS ACCEPTED, IT APPEARS THAT INCOME HAS BEEN THE MOST IMPORTANT FACTOR UNDERLYING BOTH HIGHER POSTWAR LEVELS OF AUTOMOBILE OWNERSHIP AND DECLINES IN RESIDENTIAL DENSITY. THIS CONCLUSION DERIVES BOTH FROM CONSIDERATION OF THE ESTIMATED REGRESSION COEFFICIENTS AND OF THE POSTWAR CHANGES IN INCOME AND OTHER EXPLANATORY VARIABLES. REAL MEDIAN FAMILY INCOME IN THE BOSTON AREA INCREASED BY AN ESTIMATED 56% BETWEEN 1950 AND 1960. THE INCOME ELASTICITIES OBTAINED FOR THE LEAST SQUARES AUTO OWNERSHIP EQUATIONS INDICATE THAT AN INCREASE OF THIS MAGNITUDE IN REAL MEDIAN FAMILY INCOME WOULD INCREASE AUTO OWNERSHIP PER HOUSEHOLD BY BETWEEN 28 AND 34%. WHILE RESIDENTIAL DENSITY IS EXOGENOUS IN THE LEAST SQUARES FORMULATION IT IS AT LEAST PARTIALLY DEPENDENT UPON INCOME. THE MULTICOLLINEARITY BETWEEN AUTO OWNERSHIP AND INCOME IN THE TWO-STAGE LEAST SQUARES /TSLS/ ESTIMATION MAKES IT DIFFICULT TO INTERPRET THE SIMULTANEOUS EQUATION RESULTS. EVEN SO, THE PARAMETER ESTIMATES OBTAINED FOR THE TSLS EQUATIONS SUGGEST THE SINGLE EQUATION MODELS PROVIDE CONSERVATIVE ESTIMATES OF THE EFFECT OF INCREASES IN INCOME ON AUTO OWNERSHIP. IT ALSO APPEARS THAT RAPID POSTWAR INCREASES IN FAMILY INCOME HAVE STRONGLY AFFECTED RESIDENTIAL DENSITY, EITHER DIRECTLY AS A ITEM OF CONSUMPTION OR INDIRECTLY THROUGH THEIR EFFECTS ON AUTOMOBILE OWNERSHIP. FAMILY SIZE AND LABOR FORCE PARTICIPATION APPEAR TO BE THE MOST IMPORTANT DETERMINANTS OF RESIDENTIAL DENSITY.

THE CONTINUING DEFECTION OF PUBLIC TRANSIT RIDERS IN BIG CITIES SUGGEST THAT EVENTUAL DOMINANCE BY PRIVATE AUTOMOBILES MAY BE INEVITABLE. A CHICAGO SURVEY HAS INDICATED THAT ONLY A VERY LARGE SUBSIDY WOULD PERSUADE A SIGNIFICANT NUMBER OF AUTO TRAVELERS TO SWITCH TO PUBLIC MODES. THERE REMAINS A QUESTION, HOWEVER, WHETHER THE PRIVATE AUTO IS GAINING ASCENDANCY BY GENUINE CONSUMER CHOICE OR BECAUSE PRIVATE COSTS DIFFER SUFFICIENTLY FROM SOCIAL COSTS TO PRODUCE A MISALLOCATION OF RESOURCES IN FAVOR OF AUTOS. A RESOURCE ALLOCATION BIAS CAN FAVOR PRIVATE AUTOS WHEN AN OWNERSHIP COMMITMENT ENCOURAGES AN EITHER/OR CHOICE BETWEEN PRIVATE AND PUBLIC MODES, ASSUMING THAT ALL TRANSIT IS CHARACTERIZED BY DECREASING COSTS, AND THAT PUBLIC TRANSIT MUST COVER ITS COST AND USES SINGLE, CONSTANT PRICES TO DO SO. POSSIBLE MISALLOCATION AMONG THE PUBLIC TRANSIT MODES WAS ALSO DEMONSTRATED. TO COMPENSATE FOR THESE ALLOCATIVE BIASES, A COLLECTIVE INSTITUTION WAS PROPOSED TO IMPLEMENT FIXED AND VARIABLE FEES. THE PROPOSED INSTITUTION WOULD ENABLE EACH CONSUMER TO PLAN HIS TRANSIT USAGE, TAKING ACCOUNT OF APPROXIMATE MARGINAL SOCIAL COSTS, AND ON THAT BASIS MAKE A FORWARD COMMITMENT EITHER TO PRIVATE OR PUBLIC TRANSIT MEANS. IN THIS WAY INVESTMENT IN TRANSIT RESOURCES, AS WELL AS SHORT-RUN USAGE, CAN BE COORDINATED. THE RISE IN ALTERNATIVE TRANSIT MODES MAKE THIS APPROACH MORE APPROPRIATE THAN THE TRADITIONAL REGULATION OF SEPARATE MONOPOLIES. THE ARGUMENT IS RELEVANT PRIMARILY FOR URBAN AREAS, WHERE SUBSTITUTION POSSIBILITIES ARE GREATEST, WHERE NECESSARY ORGANIZING IS MOST FEASIBLE, AND WHERE TRANSIT RESOURCES ALLOCATION PROBLEMS ARE MOST URGENT.

A SUMMARY IS PRESENTED OF THEORETICAL ANALYSIS DEVELOPED TO EXAMINE THE STRUCTURE OF FACTOR PRICES AND COSTS WITHIN A CORE-DOMINATED CITY. THIS ANALYSIS HIGHLIGHTS THE EFFECTS OF CERTAIN TECHNOLOGICAL LAGS AND TRANSPORT COST RELATIONSHIPS. THE DECENTRALIZATION OR SUBURBANIZATION OF ECONOMIC ACTIVITY IN MAJOR METROPOLITAN AREAS IS A FAMILIAR PHENOMENON. A MODEL DESCRIBING THE ECONOMIC ACTIVITY WITHIN THESE METROPOLITAN AREAS, ASSIGNS TO THE AUTOMOBILE A MORE MODEST ROLE IN THE SUBURBANIZATION OF METROPOLITAN ACTIVITY THAN IS FOUND IN MOST STUDIES. RESULTS ARE PRESENTED OF TWO EMPIRICAL ANALYSES OF THE MANUFACTURING SECTOR IN THE PARTICULAR CORE-DOMINATED CITY OF CHICAGO. THE ANALYSIS OF LOCATION IS MADE FOR THIS SECTOR SINCE MANUFACTURING IS THE LARGEST EMPLOYER IN MANY OF THESE METROPOLITAN AREAS AND HAS HAD THE LARGEST CENTRAL CITY DECLINE IN EMPLOYMENT.

Обзорная статья, посвященная методологической дискуссии 1940-х гг., в которой обсуждалась важность реалистичных предпосылок в экономических моделях. Основная борьба произошла на страницах American Economic Review, где с марта 1946 г. по март 1947 г. появились шесть статей и сообщений Р. Лестера и Ф. Махлупа, отстаивавших противоположные точки зрения по этому вопросу. Как пишет Махлуп, Борьба была ожесточенной и даже жестокой. Тысячи студентов, изучавших экономическую теорию, вольных или невольных читателей, которых стремительность обмена ударами либо шокировала, либо развлекала, могли подумать, что оппоненты теперь навсегда останутся смертельными врагами. Но эти читатели ошиблись бы. Еще прежде чем мы дошли до последнего раунда борьбы, мы обменивались дружескими письмами (декабрь 1946 г.) с уверениями, что мы не испытываем недобрых чувств друг к другу. Мы остались лучшими друзьями; в течение нескольких лет Ричард Лестер и я являемся коллегами по работе; и в знак нашей дружбы он великодушно принял мое предложение разделить сегодня со мной председательство на сессии. Таким образом, ветераны обеих противоборствующих сторон войны 1946 г. объединились для осмотра поля битвы. Это, между прочим, не означает, что кто-то из нас склонил другого в истинную веру...