Full text: Economic essays

160 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
It is further assumed that, between these three families, which 
we may distinguish as Case 1, Case 2, and Case 3, respectively, 
there is no difference in the want schedules. That is, we assume 
that all three families’ appetites and tastes are the same, so that 
in all three cases they will react in precisely the same way to 
the same opportunities to spend money. These opportunities, 
however, are not supposed to be the same, because of two vari- 
ables, namely, (1) the incomes are supposed to be different in the 
three cases, and (2) the prices in the two countries, England and 
America, are supposed to be different. Because of these differ- 
ences, in prices and incomes, the family budgets will necessarily 
differ. We shall see that the behavior of the families, in response 
to the changes in price and income, can be used to reveal the 
varying strength of their wants or desires in accordance with their 
want schedules. While their three want schedules are identical, 
their positions ¢n this common schedule are not. That is, the 
three families would behave alike if their circumstances were 
alike, but actually do behave differently because their circum- 
stances are different. 
Since the calculations here to be presented are purely illus- 
trative and make no pretense of being statistical, and since we 
wish the formule to be general, we shall call the two countries, 
not America and England, but Oddland and Evenland. The odd 
numbered Cases, the first and third, are in Oddland and the even 
numbered, the second, is in Evenland. A “map” of these coun- 
tries and of the families or Cases concerned is suggested by 
Chart I. 
What a typical family would do under different circumstances 
as to income and prices is assumed to be in accordance with the 
known statistics of family budgets in Oddland and Evenland. 
When, as I hope to do in a later paper, I come to actual sta- 
tistics, the figures used will be those averaged from actual 
families who have kept records of their total income and of their 
expenses for food, clothing, rent, etc., such figures as those col- 
lected by Le Play and the United States Bureau of Labor Sta- 
tistics. In order that the averages may be significant, it is, 
of course, necessary to have a sufficient number of cases within 
each income group (as, say, between $1000 and $1100 total 
income) to avoid the over-influence of one or two erratic cases. 
Even so, some method of “smoothing” will need to be employed.
	        
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