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.