ELEMENTARY STATISTICS FOR ECONOMICS AND BUSINESS: SELECTED READINGS.
Edited by Edwin Mansfield'51. New York: W. W. Norton &Company, Inc. 1970. 290 pp. $2.95.
Grades are imperfect indicators of ability. For illustration, compare Edwin Mansfield's exceptional achievements as an economist with his record as a Tuck student. For action, provide Edwin Mansfield's microeconomics text to students in intermediate theory and managerial economics courses and offer them his readings book as a complement to it. If motivation is a source of grade indicator imperfection, these books should help. They make clear that theory and statistical estimation aid decision making. And they include examples of the relevance of economic theory to current national problems. In short, they provide the student with some reason to learn about economic analysis.
Professor Mansfield's treatment of demand is typical. In the microeconomics text he moves logically and easily through consumer preferences, indifference curves, budget constraints, rational choice and price effects to the market demand for a product. The verbal and graphic exposition is clear and a mathematical interpretation is available but not oppressive. From theory Professor Mansfield goes on to statistical estimation. Problems of identifying the market demand relationship from actual observations of behavior are dealt with in terms that anyone can understand and are elaborated in a classic article, "What Do Statistical 'Demand Curves' Show" in the readings book. Application of theory and statistics is illustrated by a RAND Corporation study of the consumer benefits that might result from metering New York City water rather than expanding reservoirs. Theory, estimation and application are brought together in a package which should answer the students' questions of why bother to learn theory, how to interpret what is observed and when to do more than trust to chance in solving a resource allocation problem.
Answering these questions would be enough but the books do more. They give technological change some consideration and present linear programming as an integral part of economic modelling. Of course, the books are not perfect. The readings book includes too few examples of empirical studies for my taste. And the text includes some theory—part of it dealing with market structure—which seems better fit for games of logic than application to policy problems. The criticisms are minor. What is important is that Professor Mansfield has provided us with some materials to make an interesting subject interesting.
Mr. Bower is Professor of Business Economics, Dartmouth College.
