Journal Article A Comparison of Organisation Theories Get access H. A. Simon H. A. Simon Pittsburgh, Pennsylvania Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 1, 1952, Pages 40–48, https://doi.org/10.2307/2296160 Published: 01 January 1952

Compensated Changes in Quantities and Qualities Consumed Get access H. S. Houthakker H. S. Houthakker Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 19, Issue 3, 1952, Pages 155–164, https://doi.org/10.2307/2296018 Published: 01 January 1952

W E regard economic phenomena as resulting from an interaction of human actions within a field of nonhuman environmental conditions and restraints. Of the various phases of economic phenomena that may interest social scientists there is one which is of particular importance to policy-makers whether they are in business or in government. One of their special needs is for knowledge concerning the consequences or impacts of the various actions which they are able to take and which they consider taking. This paper deals with methods that more adequately attempt to meet this need. We assume that the policy-makers know what they are seeking to achieve. We also assume that they have a number of actions at their disposal and that they wish to know which of these will achieve the desired objectives in as satisfactory a manner as possible. We take it for granted that it will usually be necessary to observe discrepancies between the desired situation and the actual situation in order to guide whatever actions are taken, but we will not concern ourselves here with problems of this sort. Rather we will limit our attention to certain aspects of the problems involved in discovering and specifying the consequences of actions.

JT was something of a shock to many economists to learn from Secretary of Agriculture Brannan's testimony before a Congressional committee (April I95I) that in I950 had earned on average only 69 cents per hour for their labor compared with a national minimum wage of 75 cents an hour and rates of one to two dollars or more in other occupations. The 69-cent average (now revised to 70 cents) seemed contrary to several common notions. It did not square with general belief that farmers are getting too much. It seemed out of line with many undeniable cases of real farm prosperity. Since it was an official figure, friendly critics argued not that it was inaccurate but that it was unduly weighted downward by including many submarginal who produce very little for markets. Others raised additional questions, particularly as to validity of comparing farm returns per hour with returns per hour in other occupations, and as to why people living on farms are willing to take less in dollar income. The problem of comparing farm with nonfarm has been a baffling one for many years; in fact, ever since annual estimates of farm were started more than 25 years ago. Ir I92 0'S, equality for agriculture, parity, and the farmers' share of national income were phrases in common use by farm leaders, agricultural politicians, and agricultural economists. The specialists in farm comparisons in 1920's recognized that were both entrepreneurs and laborers; that farming was both a business and a way of life; and, if comparisons with nonfarm were to be made, it was necessary to assign some value for farmer's labor to get residual return on his capital, or to assign some value for use of his capital and management in order to compute residual return for his labor. This, of course, is still an arithmetical necessity. There are other debated issues, such as how to impute values to production used in farm home and how to deal with differences between other elements in farm and nonfarm living standards. Agricultural statistics have been expanded and improved a great deal over past twentyfive years, and a great deal more is known about farm and national income, about per capita farm and nonfarm income, about size and distribution of farm and nonfarm income, and about reduced labor and increased capital requirements in agricultural production, but for most part basic questions in comparative are still unsolved.

IN recent years several attempts have beeni made to set up macro-econometric models for the United States and to derive statistical estimates of relevant parameters for the prewar period.1 To the knowledge of the present author few, if any, attempts have been made to deal statistically with econometric models using postwar data. There are good reasons for this. In the first place if annual data are used, too few observations will be available for an adequate statistical analysis. If monthly or quarterly data are utilized, then difficult problems arise, for example the treatment of seasonal variation and the possibility of substantial correlation of disturbances. In spite of these latter difficulties an attempt is made in the present paper to analyze statistically a very simple econometric model for the United States using quarterly national income data for the period I947-50. The statistical analysis is admittedly weak at certain points and must therefore be regarded as preliminary and tentative. In addition to the difficulties mentioned above the problem of multicollinearity 2 is present, as is usually the case in multiple correlation studies involving economnic data. All of this means, of course. that the regression coefficients tend to be rather uncertain and that therefore the estimates of the structural parameters must be interpreted with caution.

Journal Article Qualities, Prices and Budget Enquiries Get access H. Theil H. Theil Amsterdam Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 19, Issue 3, 1952, Pages 129–147, https://doi.org/10.2307/2296016 Published: 01 January 1952