IN a recent pioneering paper Arrow, Chenery, Minhas, and Solow,' hereafter referred to as Arrow, et al., have proposed a new class of production functions of great flexibility. Essentially, they address themselves to the following problem: If it is given that a certain relationship exists between wages and output per man-hour, then what sort of production function rationalizes this relationship. Specifically if it is given that

N the postwar period, a great deal has been written about the behavior of the consumer and almost as much (at least in the popular press) on movements in the stock market. This paper presents some estimates of stock market gains and losses of the household sector in the postwar period, and it examines some statistical consumption functions which include the stock market changes as an exogenous variable. The over-all conclusions of this study are that postwar stock market movements, while large and yielding high over-all positive returns on stock holdings, have had little or no impact on aggregate consumption. The major reason for the lack of a statistical relationship with consumption is the fact that the distribution of stock ownership is highly skewed, the bulk of stock resting primarily in the hands of highincome recipients whose spending patterns are little affected by quarterly short-term stock movements.