Regional Income, Studies in Income and Wealth, Volume 21.Review by: W. W. McPhersonJournal of the American Statistical Association, Vol. 53, No. 281 (Mar., 1958), pp. 240-241Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2282605 .

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240 AMERICAN STATISTICAL ASSOCIATION JOURNAL, MARCH 1958

most valuable for reference purposes to social scientists and laymen alike. The textual narrative, however, is likely to prove of comparatively limited value to the specialist, though it may prove useful to the layman. Yet, by no means is this intended to sug- gest that the statistics used are above reproach. As a consequence of the authors' desire not to overload the tables with long qualifying footnotes and extended method- ological discussions, the unwary layman for whom much of this is intended might be easily misled by a lack of explanation concerning the quality, character, comparability and reliability of statistics in different parts of the world. One would have thought that at least a general discussion of this problem should have been incorporated into the introduction. This assumes particular importance when the authors use data of clearly dubious validity without explicit qualification. As an instance, one might cite the rather meaningless population figure of 463.5 million for China, or the grossly erroneous national income figure for the USSR given as $59.5 billion for 1949. One might also question the meaningfulness of an estimate of world income. Another serious shortcoming of this book is its comparative neglect of Asia. The text deals almost exclusively with Europe and the U. S. For example, in tracing colonial expan- sion, Japan's colonial policy and empire are completely omitted.

There are a number of other estimates, figures, and methods to which one could take exception. However, this is perhaps inevitable in a survey of this vast scope. It does not reduce one's admiration for the authors' breadth, ability, and willingness to tackle such a vast work, nor does it seriously impair the usefulness of this book as a reference work, particularly if used in combination with the original source references given in the valuable bibliography.

Regional Income, Studies in Income and Wealth, Volume 21, National Bureau of Economic Research, Conference on Research in Income and Wealth. Princeton: Princeton Univer- sity Press, 1957. Pp. x, 408. $8.00.

W. W. MCPHERSON, North Carolina State College T HIS volume of Studies in Income and Wealth, edited by Frank A. Hanna, contains the ten papers, and comments of participants, which were prepared for the Con-

ference on Research in Income and Wealth held in June, 1955. The subject matter includes discussions of problems and present status of concepts, procedures and data with respect to estimation and analysis of income geographically oriented on a local, state, or regional basis.

Following the "Introduction" by Frank A. Hanna, the ten papers are: "Con- ceptual issues of regional income estimation" by Werner Hochwald, "Problems of assessing regional economic progress" by Harvey S. Perloff, "The value of the regional approach in economic analysis" by Walter Isard, 'The geographic area in regional economic research" by Morris B. Ullman and Robert C. Klove, 'Analysis of inter- state income differentials: theory and practice" by Frank A. Hanna, 'Interregional differentials in per capita real income change" by Abner Hurwitz and Carlyle P. Stallings, "City size and income, 1949" by Edwin Mansfield, "Appraisal of alternative methods of estimating local area incomes" by Lorin A. Thompson, "Measurement of agricultural income of counties" by John L. Fulmer, and "Development of postcensal population estimates for local areas" by Henry S. Shryock, Jr.

For professional workers who are engaged either in the development or use of income estimates, the discussions of concepts, procedures, and data used in geographi- cally (space) oriented income estimations provide a useful review. It is generally agreed that available data are incomplete, inaccurate, and/or improperly classified for fully meeting the demands for space oriented income estimates. However, too much attention is given to the search for "short-cut" techniques to use as substitutes

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BOOK REVIEWS 241

for adequate and accurate observations of the past, and not enough attention is given to the question of how, in the future, the adequacy and accuracy of observa- tions might be increased. Also, the book contains little discussion of Regional Income oriented to the future. As guides to public policy as well as to many economic deci- sions of private firms, the work must go beyond estimates and analysis of past income and resource use to explore future production and income possibilities on a geograph- ical basis. To do so requires more complete and accurate quantitative and qualitative inventories of endowed resources, technical coefficients of production, and prospective regional differences in factor supply and product demand.

Limitations of space will permit only a few specific comments here. Walter Isard's concern about the need for an overhauling of the tool kit for regional analysis (p. 78) is a valid one. But much more can be done than yet has been with the present state of economic and statistical knowledge, especially if the adequacy and accuracy of observations are improved.

This book has failed to exploit fully economic knowledge in the construction of logical models, especially in the analytical work. For example, in the selection of independent variables, for meaningful analytical results, more attention should be given to those factors that are expected to generate income and differences in resource use rather than those items which merely show high correlation coefficients. Ernest W. Grove's skepticism (p. 358) with regard to mechanical formulas of the type pro- posed in this book is warranted. These short-cut formulas for use in the estimation of agricultural incomes of counties, to the extent that they have a theoretical founda- tion, are based on an erroneous interpretation or on an erroneous application of com- petitive equilibrium theory. As J. N. Keynes states so succinctly, "If it [the method] is purely empirical, then it [the conclusion or the truth] will be established only with a more or less high degree of probability, and it cannot be extended far beyond the range of space or time which the instances on which it is based were collected. If, on the other hand, it is obtained deductively, then it is hypothetical until it has been determined how far, and under what conditions, the assumptions on which it rests are realized in fact."'

The need for data on a county as well as a state basis as cited by Harvey S. Perloff (p. 39) is very important, not only because of the changing patterns of economic rela- tionships with respect to time, but because effective analysis requires that data be classified and aggregated in different ways for different analytical purposes. Much of our present data are reported in such aggregative terms that the possibilities and effectiveness of analytical work are reduced considerably from what otherwise would be possible.

This book should promote an increased interest and an acceleration in the joint efforts of statisticians and economists in the estimation of incomes that can be used effectively in any analysis of economic activities in various geographic areas.

Views On Regulation, Consumer Instalment Credit, Part III, Vol. 1. George D. Bailey. Washington, D. C.: U. S. Printing Office, 1957. Pp. vii, 230. $1.00. Paper.

JULES BACKMAN, New York University

THIS iS one of six volumes included in the Federal Reserve Board's survey of con- sumer installment credit. It contains letters-or digests of letters-received mainly

from various business groups concerning their attitudes toward the desirability of installment credit regulation. Trade associations, commercial banks, sales finance companies, manufacturers, and various retail groups were among those surveyed.

I John Neville Keynes, The &ope and Method of Political Economy. Fourth edition, New York: Kelley and Millman, 1955, p. 5.

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