According to the Easterlin hypothesis, the positive relationship between income and fertility is dependent on relative income. The hypothesis presumes that aspirations are significantly determined by family background. If income is high relative to aspirations, individuals will tend to have more children. The definition of variables as sibling differences controls family background and yields a measure of relative income. Analyzing the Kalamazoo Brothers sample in this fashion produces no evidence in support of the hypothesis.

The article presents a reply to authors John F. Kottas and Hon-Shiang Lau, on the appropriate size of samples in &chi 2 tests. The paper by FHN falls into the realm of accounting risk analysis. In risk analysis, it attempt to incorporate uncertainty into the decision process and, at the same time, try to make the analysis as simple as possible so that it can be understood by the manager and so that it can be done by those with elementary knowledge in statistics and mathematics. There is, therefore, a need in risk analysis to reduce intractible functions to reasonable approximations, preferably to the normal approximation as it is the most familiar and easiest distribution for the practitioner to use. In simulation experiments, the record has been that the choice of sample size was, for the most part, arbitrary. Better yet would be a choice based on the fulfillment of some important criteria of validity, for example, that the minimum expected frequency in a cell be no less than one in a chi-square goodness-of-fit test.

Reviews the book "Accounting Trends & Techniques," 13th ed.