Analyses of Minnesota Incomes, 1938-39 by Roy G. Blakey; William Weinfeld; James E. Dugan;Alex L. HartReview by: Edward F. DenisonJournal of the American Statistical Association, Vol. 39, No. 227 (Sep., 1944), pp. 393-394Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2280048 .

Accessed: 15/06/2014 04:10

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.

.

American Statistical Association is collaborating with JSTOR to digitize, preserve and extend access to Journalof the American Statistical Association.

http://www.jstor.org

This content downloaded from 91.229.229.101 on Sun, 15 Jun 2014 04:10:03 AMAll use subject to JSTOR Terms and Conditions

*BOOK REVIEWS 393

weighted by the value of its contribution in 1939. To answer the question, how adequately does an index of minerals consumption measure the real contribution of capital and enterprise, implies the ability to distinguish in the total return to capital that part arising from productivity changes, since this appears to be included in the assumptions regarding the efficiency of resource use. Similarly, this is true in using manhours as a measure of real labor input. When we add to this the assumption that the contribution of government is equal to prewar corporate income taxes extended for later years by an index derived from manhours and materials, we are in the posi- tion of Alice facing Humpty Dumpty.

In translating the measure of resource input into terms comparable with the other segments of GNP in 1939 prices, the attempt is made "to value war output not at actual 1939 prices . . ., but at prices it would have fetched in 1939 had it been produced under conditions comparable to peacetime . . . [with] the efficiency of resource input characteristic of comparable peace- time industries grown to maturity without the urgent haste and waste of wartime."

Taking the position that comparable resources devoted to war relative to nonwar goods are compensated at rates not corresponding to the efficiency of their use, Dr. Kuznets assumes that the efficiency of resources devoted to munitions in the first half of 1943 relative to similar resources used in the metals, petroleum, chemical and construction industries in 1939 varied be- tween 0.8 under assumption a preferred by him, and 1.3 under assumption c. An increase of two-thirds is allowed in the efficiency of munitions produc- tion relative to nonwar output over the period. This combined with assump- tion a, regarding the level of relative efficiency in the munitions and nonwar sectors of GNP, implies that in 1939 the efficiency of resource utilization by the "war industries" in producing munitions was but half that of the same group of industries producing nonwar output.

This is in line with Dr. Kuznets' position that the basis of valuation of war goods is substantially different from that extant in the "competitive" nonwar sector of the economy. Noting that the assumptions concerning relative efficiency are "illustrative" readers may well heed the author's warning to view the results in the same light.

JOHN M. CRAWFORD

Washington, D. C.

Analyses of Minnesota Incomes, 1938-39, by Roy G. Blakey, William Wein- feld, James E. Dugan and Alex L. Hart. Minneapolis: The University of Minnesota Press. 1944. xxvi, 367 pp. $5.00.

This is a collection of three monographs which analyze data from the Minnesota income study, together with an introduction and excellent general summary by Professor Blakey.

In the first study William Weinfeld relates averages and distributions of individual earnings (wages, salaries, and entrepreneurial net income) in

This content downloaded from 91.229.229.101 on Sun, 15 Jun 2014 04:10:03 AMAll use subject to JSTOR Terms and Conditions

394 AMERICAN STATISTICAL ASSOCIATION*

Minnesota to the earner's sex, age, occupation, and weeks of employment, and to the size of community in which he resides. He also relates income of families and single individuals from all sources to various characteristics of these economic units. Cross-classification of principal variables is undertaken in each case. The author's style and disinclination to seek explanations underlying the given data render an intrinsically interesting subject dull reading.

James E. Dugan's analysis of "Housing as Related to Income" is a note- worthy achievement. His goal is discovery of the factors which determine the demand for housing and the fashion in which they operate. The principal investigations relate extent of home ownership and rent paid by renting families to such variables as income, size of community, occupation and family composition. Income effects are successfully isolated from the in- fluence of his other determinants. Information is drawn from Housing Cen- sus and Real Property Inventory data, as well as from the Minnesota Income Study sample.

This author sensibly accepts "a fairly regular and consistent relationship between two variables" as sounder basis for reliance upon relationship than the X2 or other statistical tests of significance. Hart, in the third section of the book, appears to be of an opposite opinion on this point (p. 252, but see also p. 257).

Sound organization, investigations beyond the given data for explanation of observed relationships, effective use of charts, and novel conclusions en- liven Dugan's section of the book.

Alex L. Hart assays data collected in the Minnesota field canvass by three types of test: comparison of income from covered employment reported by 232 earners in the field survey with their earnings as reported by employers to the Minnesota Unemployment Compensation Division; comparison of certain characteristics of the farm sample with the Census of Agriculture; and, by the method of subdivision of the sample, an analysis of randomness from internal evidence. None of the tests is reassuring for schedule-interview surveys. Most disturbing, because least subject to rectification, are the wide errors shown by the first test to exist in the basic data collected in the field canvass. Evidence of a definite downward bias in the field survey (as con- trasted with a random distribution of errors of reporting) must be qualified by the consideration that there are 22 chances in 1,000 that the observed bias would arise from chance. A moot point is the extent to which Hart's criti- cisms of the Minnesota data undermine Weinfeld's and Dugan's analyses. The author offers several suggestions for improving sampling procedures in future surveys, but "questions the wisdom" of attempting to secure income data by the schedule-interview method.

This volume, demonstrating the value of analysis of data by the techni- cians who prepare them, suggests that such analysis by the technical staffs should more often follow large-scale statistical investigations.

EDWARD F. DENISON

Washington, D.C.

This content downloaded from 91.229.229.101 on Sun, 15 Jun 2014 04:10:03 AMAll use subject to JSTOR Terms and Conditions