Effect of Variability of Incomes on Level of Income-Expenditure Curves of Farm Families

Abstract

ities) typically relate one set of measurable magnitudes to another set of measurable magnitudes. Non-measurable influences on the event to be explained are often simply ignored, even where they are really quite important. In macro-economics, for example, the volume of investment is often explained in terms of such numerical variables as the rate of interest, the average price of capital goods, the rate of change of population, etc., etc. But ignored are such influences as the current temper of the Kremlin, the health (and feelings of strength or weakness) of the important decision-makers, the confidence of the investing community in the good intentions of the government, or the doings of the scientists engaged in basic research. In demand theory, to take another example, the demand for a certain commodity may be expressed as a function of such determinants as price, prices of complementary or substitute goods, national disposable income, and the like; but the character of the sales appeal of the principal advertisers is ignored, as is the mouth-to-mouth reputation of the product, or the complicated social processes that produce changes in tastes. Mathematical economists, by acting as if only numerical variables influence other variables in the world, tend to be blind to many of the forces acting in their field of interest; and their analysis, to put it gently, suffers thereby. A polarized view of reality may be easy on the eyes, but it is not realistic. In closing, we might repeat again that these various elements of unrealism are not confined to mathematical analysis alone literary economics is susceptible to the same weaknesses, though in lesser degree. And also, it is not all mathematics which is afflicted by the infirmities enumerated; the fault lies largely with the particular type of mathematics customarily used by economists. Economists, for evident reasons, have usually borrowed their mathematical tools from their more spectacularly successful academic colleagues calculus from physics or statistics from such fields as genetics and these tools lose much of their serviceability and aptness in the transition to such a different field. An increase in mathematical inventiveness on the part of economists might go far to overcome the various weaknesses of mathematical analysis in economics.