of the explanation for the unexpectedly low level of consumption in I95I and 1952. 4. The formula assumes that the behavior of large aggregates of individuals is reasonably stable. Unless this assumption is made no prediction is possible and the limits within which any economic speculation is valid becomes doubtful. Absolute stability of behavior cannot be expected, and to the extent that behavior is unstable the formula will fail. 5. There are without doubt other variables affecting consumption which have been ignored in the formula. Controls and wartime shortages of consumers' goods are two examples. Campaigns to induce consumers to save and buy bonds, and waves of speculative excitement are others. Changes in the distribution of incomes might also be expected to have some effect on consumption. 6. The statistics of disposable income and consumption may need some adjustments. Disposable income, for example, is a net figure after deducting depreciation calculated mainly on an original cost basis. Consumers, however, may well behave as if depreciation were calculated on a replacement cost basis. 7. The measurement of wealth is subject to conceptual and statistical difficulties which make it particularly elusive. The measure may moreover need to be adapted to the purpose for which it is being used. For example, Goldsmith has included the structures and durable equipment of corporations at their current values. In assessing the influence of investments in corporations on current consumption it may be that the market value of the common stock and the bonds issued by the corporations would give a better measure. Further investigation may make it possible to allow for some of these disturbing elements. To make allowance for instability of behavior will be more difficult but may be possible. Nevertheless, in view of these uncertainties the question naturally arises, can any formula be expected to give a reasonable guide to the consumption habits of individuals? The answer will be found only through the success or failure of some formula, such as the three considered in this paper, to explain consumption for a sufficient number of years. The closeness of fit of all three formulas at least holds out some promise that a useful guide can be found in this way. After reviewing the circumstances in which any formula of this kind might be expected to fail it is impressive to find how well all three formulas do in fact predict the behavior of consumers.