166 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK
Discussion of the Results
Our two chains of calculations show that if we take as our
unit, or “one wantab,” Ws, the want-for-one-more dollar of Case
2 in Evenland,—we can compute the wants-for-one-more dollar,
Wi, and Ws, in Cases 1 and 3 in Oddland. These are .75 and
3315 wantabs respectively.
We may express the result by saying:
In one country, Oddland, where food prices are 4/3 as high as
in another country, Evenland, a family, Case 1, so circumstanced
as to choose the same food ration as a given family, Case 2, in
Evenland, will esteem the dollar 34 as much. That is, the wantfor-one-more
unit of food being the same in the two Cases, that
for one more unit of money will vary inversely as the price of
food.
Similarly the want-for-one-more unit of housing accommodation
being the same in Cases 2 and 3, that for money varies
inversely as the price of housing. Rents of any given quality
being three times as high in Oddland as in Evenland, the
desire for an extra dollar in Case 3 is 14 as great as it was in
Case 2.
These two simple and obvious comparisons, each being between
a pair of Cases, taken one in Oddland and the other in Evenland,
enable us next to compare the two Cases in one and the same
country, Oddland. We can now say that the wants-for-one-more
dollar in Cases 1 and 3 are as 34 is to 14 (or as .75 to .3314 or as
100 to 44 4/9).
It will be noticed that these figures depend solely on the price
‘ndexes. The budget ratios are not involved in the two chains.
We have, in effect, used Evenland conditions merely as a
measuring rod by which to compare the two cases in Oddland
with each other. In order that these two Cases should show
any contrast it is essential that the two prices—those of food
and of rent—shall, in Oddland, bear different ratios to their
prices in Evenland. If, instead of the widely different price
indexes 4/3 and 3/1 or (1.3314 and 3.00) we had had equal
indexes, such as 1.50 and 1.50, the two Cases 1 and 3 would show
no contrast at all in the wants-for-one-more unit.
We have reached. as our first numerical result, that, as to the
