Easterlin, Richard A. The Reluctant Economist: Perspectives on Economics, Economic History, and Demography.

Easterlin, Richard A. The Reluctant Economist: Perspectives on Economics, Economic History, and Demography, New York: Cambridge University Press, 2004, 285 pp., $75.

The argument Professor Easterlin pursues in this book is that while several research questions of interest to economists are multidisciplinary in nature, economics graduate programs are not doing enough to prepare young scholars to carry on multidisciplinary research. He motivates this argument with a significant collection of his own multidisciplinary research in economic history and demography, showing that the most compelling explanations for the phenomena under study are not completely economic ones. Easterlin recalls that Simon Kuznets's multidisciplinary, empirically motivated research had a profound impact upon him during his graduate school years at the University of Pennsylvania. He reports that after his experience working with Kuznets and demographer Dorothy S. Thomas on their joint project (estimating internal migration, labor force, and income by state spanning 1870-1950), he was decidedly reluctant to take a narrow economic view of research. Hence, the title of his book, The Reluctant Economist.

This perspective leads to consideration of multiple research questions engaged by Easterlin spanning the past several years, and how a multidisciplinary perspective produces better research than the unidisciplinary, economic perspective. Easterlin begins his exploration in general terms, first pointing out how economists and noneconomists differ on what counts as a valid concept and as valid data. In particular, while the economics profession resists the use of subjective testimony data, there is much knowledge gleaned in other disciplines from such data. Easterlin states that one counterintuitive empirical fact that requires explanation is that subjective well-being in the United States is virtually unchanged since the 1940s while real per capita income has doubled. While economists tend not to respect subjective well-being data, he argues that this view is not tenable if economists will also accept without question data regarding the concepts of inflation, unemployment, and real GDE He argues that all of these concepts are imperfect and that a multidisciplinary perspective encourages respect for that fact. In all cases, what is most important for analysis are not particular data points in a given time period but rather their changes over time. Of course, in our neighborhood of agricultural/environmental/resource economics, this tension that Easterlin addresses is playing out most famously in the context of contingent valuation analysis.

The remaining chapters examine multiple specific research questions in economic history and demography. The central question explored throughout the economic history chapters regards the inability of a narrow economic approach to explain why rising incomes raise health/longevity in some places/times but not in others. Easterlin argues that while economists tend to model the differences from the perspective of the household decision-making unit, the differences are compellingly motivated by institutions that arise beyond the scope of household decision making or influence. Examples of such institutions are mass general education, public sewers, public knowledge of disease prevention, and most generally the development of modern science. Taking this view, if incomes rise, health/longevity may or may not rise, depending upon the states of social institutions being sufficiently well developed to quickly transform greater income into greater health/longevity. Thus, we see differences in health/longevity among the same levels of income across countries/regions. Easterlin argues that progress toward understanding these relationships was not made until economists began consulting more carefully with noneconomists, in order to better understand, for instance, the importance and timing of technological change in ceramic piping that enabled public sewers in some places and not in others, and the importance and timing of progress in germ theory. Importantly, Easterlin remarks that much of this knowledge was generated in modest laboratories, casting doubt that significant economic growth per se is necessary to motivate improvements in health/longevity. Rather, he argues that prudent public (health) policy can yield significant gains amid modest--or even zero--income growth.

Turning then to demographic research, Easterlin questions the appropriateness of modeling birth rates as deliberate choices that are functions of income, unchanging individual tastes and preferences, the cost of children, and the prices of other goods. In the presence of certain "supply-side" factors--such as low natural fertility--it may be the case that no increase in income or fall in the price of having and maintaining children will yield a change in household size toward desired household size. If we consider household size strictly in terms of the "demand for children," then our model could have poor predictive power indeed. And to explain declining birth rates in the presence of increasing incomes, economists will especially need to collaborate with scholars outside of economics who specialize in such "supply-side" factors.

This is a very fine book that will be of interest to a broad range of economists, including those engaged primarily in the agricultural, environmental, and resource economics. Easterlin is a master designer of clever, important research questions and his approach offers good exercise for all research minds. And materially speaking, several agricultural, environmental, and resource economic problems feature a historical/demographic component. Thus, in one volume, researchers who are less than familiar with research methods in economic history and demography can obtain a clear, concise introduction.

One unit of constructive criticism comes to mind, however. While many readers will concur with Easterlin's general sentiment--that multidisciplinary work is important and economics graduate programs are probably not doing enough to prepare students for the next generation of important research--I believe further consideration would reveal that the state of affairs is not as grim as Easterlin describes. First, it strikes me that more and more doctoral economics students do have dissertation committee members outside of economics. Second, to my eye, more and more articles appear in the agricultural, environmental, and resource economics journals that are co-authored by economists and noneconomists. Thirdly, and perhaps most importantly, Easterlin should expand his multidisciplinary net beyond the social sciences to the natural sciences and mathematics/ statistics, thereby also giving a bit more credit to members of the economics profession who worry primarily/exclusively about theoretical problems. For just one example, I absolutely concur with Professor Easterlin's point mentioned earlier that it is not the static position of variables that are so important as opposed to their behavior over time. Concurrent with Professor Easterlin's career, Professor Clive Granger co-discovered the theoretical structure of cointegrated variables, so many of which appear in economic problems. As Granger describes in his Nobel lecture, it is conceivable that his sparse background in economics actually facilitated his thinking about what is fundamentally a class of theoretical statistical problems. Professor Granger's contribution thus proves Professor Easterlin's point a fortiori, in that a multidisciplinary approach that includes little to no formal economics training can yield tremendously innovative insights to our economic condition.

Jeffrey Wagner

Rochester Institute of Technology