just as proponents of a new theoretical approach speak in enthusiastic terms, so those who reject their approach often appear ready to condemn it on inadequate evidence. The purpose of this note is to discuss Tobin's statistical findings rather than to analyze differences in the theoretical approach. The reinterviews incorporated in the I952-53 Surveys of Consumer Finances, which Tobin uses, are adequate to warrant his conclusion that in that year expressed buying intentions did have predictive value (even though the buying intentions questions in those surveys are far too brief). But those data are insufficient and irrelevant for any test of the predictive value of attitudinal questions other than buying intentions. Therefore Tobin's assertion denying such predictive value (page iO) has no bearing on the Survey Research Center's position regarding the relation of consumer expectations to consumer demand for durable goods. Tobin tries to achieve the impossible by constructing an attitude index out of four questions, (i) the evaluation of past changes in personal financial conditions, (2) information about past income changes, (3) the evaluation of current marketing conditions, and (4) income expectations for the next year. Two of the questions used by Tobin (i and 3) are also contained in the six-question index constructed from the Center's Periodic Surveys. By adding question 2, Tobin loads his index with material about past changes in personal finances. Regarding Tobin's fourth question, Katona and Mueller showed six years ago (in Consumer Attitudes and Demand, pages 69-70), that it is realityoriented and insensitive rather than reflecting people's hopes and fears; the Center has therefore substituted other questions to measure personal financial expectations in its Periodic Surveys. There is not a single question in Tobin's index which reflects the more volatile expectations (the Center's six-question index contains four such questions). It is not at all surprising that Tobin's index duplicates to a large extent the predictive information contained in financial data and has no independent forecasting value. Our position, as it will be set forth soon again in detail, is that both buying intentions and other attitudes should be used to supplement (not to supplant) financial information. The tests of the predictive value of certain consumer expectations are being continued. It may be mentioned that in 1957 consumer expectations other than buying intentions became pessimistic earlier than buying intentions and in I958 they turned optimistic well before buying intentions. In spite of this evidence, Tobin is right in arguing that more observations are needed before conclusions can be based on rigorous statistical tests. There are many other points of disagreement, for instance, regarding the conclusions drawn by Tobin from Eva Mueller's article in the I957 American Economic Review, or regarding Tobin's notion that adding to liquid assets is a sign of pessimism. I wish to contradict particularly Tobin's statement that our treatment of price expectations is arbitrary (see his footnote 7). This treatment has been derived from the theory of psychological economics; additional empirical data supporting the treatment are being published in the May I959 issue of the Quarterly Journal of Economics. * James Tobin, On the Predictive Value of Consumer Intentions and Attitudes, this REVIEW, xui (February I959),

IN the fall of I954 the Board of Governors of the Federal Reserve System at the request of the Subcommittee on Economic of the Joint Committee on the Economic Report appointed consultant committees to study certain aspects of economic statistics. The committee reports were submitted during the summer of I955 and were published shortly thereafter both by the Federal Reserve Board and the U. S. Government Printing Office Two of the reports contain extensive discussions of survey statistics which call for some comment.' I am sure that the substantial work carried out by the eminent committees appointed by the Federal Reserve Board will prove useful. Only the future can tell what specific effects the reports and the publicity given to them will have. I may mention a few probable beneficial effects of the reports on consumer statistics. The first aspect relates to consumer economics. Regarding the past neglect of consumers by economists, it may suffice to recall that not so long ago of the three sectors of the economy only two, business and government, were assumed to be autonomous in generating income and shaping economic trends. During the last ten years, however, the importance and autonomy of consumers have been much more widely recognized. The impact of rising incomes and the influence of purchases of consumer durables on business-cycle trends, the work of Arthur Burns and the National Bureau, the Surveys of Finances conducted cooperatively by the Federal Reserve Board and the Survey Research Center, as well as the progress of market research brought about this recognition. The Smithies report will add to it. Secondly, regarding the use of sample interview surveys for economic research, the unequivocal statement about the indispensability (page i) of survey statistics, and the cogent arguments marshalled in explanation of the statement, will no doubt accelerate the current trend. Turning to a third aspect, the intermarriage of socio-psychological studies with more narrowly conceived economic studies, we find that the reports do not consider explicitly the basic problems of cross-disciplinary or behavioral research. Nevertheless, the emphasis placed on the study of attitudes, expectations, and intentions in the one, and on savings habits and purposes in the other report will, I believe, facilitate the task of students of businessmen's and consumers' behavior. Finally, I expect positive results from the committees' insistence on more methodological research. As a mere guess, I may say that in my opinion government agencies and foundations, even if they hesitate to adopt some of the more extensive and expensive recommendations, will be responsive to methodological projects suggested by the committees. In commenting on the reports I shall be concerned exclusively with scientific conclusions. Regarding the extensive observations about operational techniques and organizational matters, I might say simply that I agree with most conclusions. I feel especially indebted to the members of the committees for recommending that more complete data be collected, more frequent periodic surveys conducted, the analysis of results extended, and further checks on the accuracy of results sought. I shall here consider fundamental problems of theory and research design, regarding which there exist some differences of opinion, rather * This paper was delivered at a joint meeting of the American Economic Association and the American Statistical Association in New York, 29 December, I955. The author is Program Director of the Survey Research Center, University of Michigan, which conducts the Surveys of Finances for the Federal Reserve Board. 1 The two reports to be discussed here are entitled Consumer Survey (Chairman, Arthur Smithies) and Statistics on Saving (Chairman, Raymond Goldsmith). The reports will be referred to by the names of the committee chairmen. The page references in this paper refer to the Federal Reserve Board publications.

During the past twelve years most of the theoretical discussions of the problem concerned long-run effects of income changes which are not considered in this paper. The Keynesian thesis about the short-run relationship between changes in income and saving appears to have been accepted by most students.2 Empirical evidence for the validity of the short-run relationship may be sought, and was usually sought in the past, on the aggregative level, by comparing year-to-year changes in national income, aggregate consumption, and saving. The same relationship that prevails between aggregates may also be found, however, as expressly stated by Keynes, between changes in income and consumption of individual income receivers (or groups of income receivers). It is the latter problem that will be raised here: do recent studies of the financial behavior of families shed light on the relation

George Katona, Rensis Likert, Relationship between Consumer Expenditures and Savings: The Contribution of Survey Research, The Review of Economics and Statistics, Vol. 28, No. 4 (Nov., 1946), pp. 197-199

I. Personal interviews with a representative sample of business executives, 67; sampling, 69; interviewing, 70. — II. Study of industrial mobility, 72; advantages of Michigan location, 72; disadvantages of Michigan location, 76; qualitative information, 78; conclusions, 81. — III. Study of investment decisions, 82; the direct question of why, 83; correlation analysis, 86; detailed analysis of correlation cells, 88; summary, 89.