Abstract
IN a paper on econometric researches, appearing in the series of publications dealing with economic problems edited by Dr. R. Gilrat (No. 412 ; Hermann and Cie., 6 Rue de la Sorbonne, 6, Paris, 1936), Prof. R. Ray deals with the demand for goods for direct consumption. Results obtained in this question of demand, whether by experimental methods or by the application of statistical methods to observations, afford a strong presumption in favpur of the quantitative investigation of economic phenomena. Prof. Ray discusses the theories of Cournot, Dupint and Marshall, who considered demands as the function of a single variable, as well as the theories of Walras and the mathematical school. His own investigations on products for direct consumption suggest that for certain products or services, coefficients of elasticity can be used to characterize the demand. In considering the elasticity of demand, it is essential to analyse the part which the law of substitution plays, and accordingly it is desirable to limit the investigations to products which lend themselves less readily than others to substitution, or to investigate a group of products which are readily substituted one for another in meeting the same need. The method of multiple correlation offers interesting possibilities, and Prof. Ray concludes that the demand for goods or services investigated so far is nearly always inelastic.
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Quantitative Economics. Nature 141, 640 (1938). https://doi.org/10.1038/141640a0
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DOI: https://doi.org/10.1038/141640a0