Changing consumer choices have built
microchip factories where cotton fields used to be and have doomed
cities from New Bedford to Detroit, while the impact of these
choices on jobs and tax revenues has stimulated the creation of
models of consumer behavior. Even finely tuned econometric models,
however, have not served well as guides for policy choices, for
they have relied chiefly on data for the Great Depression and the
Cold War era or on biased budget surveys. Stanley Lebergott here
provides the way to greater realism with new data for the entire
twentieth century, including the decades of peacetime prosperity.
The new measures also permit moving from the level of the nation to
the state.
Analyzing our interest in individual economic well-being,
Lebergott argues that consumer expenditure provides a better guide
than the usual data on money income before tax. He also challenges
continued reliance on a single consumption function in macro
models. In other essays he uses the new data to demonstrate that
the supposed "flawed prosperity" of the 1920s was not responsible
for the Great Depression; points out the limitations of the usual
consumer budget surveys; and contrasts the role of age, nativity,
and other factors in creating interstate differences. The new data,
which link to the official BEA estimates, will provide raw material
to test and extend theories of how the consumer and the economy
function.