Sanford V. Berg

English

Research Papers in Economics

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Volume Title: Annals of Economic and Social Measurement, Volume 1, number 3
Volume Author/Editor: Sanford V. Berg, editor
Volume Publisher: NBER
Volume URL: http://www.nber.org/books/aesm72-3
Publication Date: July 1972
Chapter Title: Editor's Corner
Chapter Author: Sanford V. Berg
Chapter URL: http://www.nber.org/chapters/c9432
Chapter pages in book: (p. 257 - 258)Annals of Econo,nie and Social Measurc,nc'nl, 1/3, 1972
EDITOR'S CORNER
Issue number 3 of the AnnalsofEconomic and Social Measurement differs From
past issues by having longer articles which examine in great depth several metho-
dological problems: statistical inference in time series analysis, criteria for the
evaluation of econometric models, and techniques for creating "synthetic"
microdata sets. The Board of Editors has a flexible policy with respect to the length
of articles, particularly when the research is provocative or innovative. A paper
with a single theme published in its entirety is more useful to the research com-
munity than if it is split into several related papers which are then published in
journals of varying degrees of availability or with relatively small audiences. We
want the Annals to serve as a focal point for new developments in measurement
and computer applications; the articles in this issue illustrate how advances in the
social and managerial sciences occur in different formats and contexts.
In the lead article, Benoit Mande!brot presents a critique of common statistical
methods of time series analysisparticularly correlation.I-Ic promotes R;S
analysis as an alternative technique since it permits one to escape from various
kinds of dependence observed in time series data. To the extent that non-periodic
cycles exhibited by economic and social data are like those of fractional noise,
the technique should have wide applicability in research. Some of the work he
describes has been supported by the National Bureau of Economic Research,
although he has been developing the ideas for several years.
The second paper attempts to develop a "clear and accepted analytical basis
for the selection of proper criteria for model evaluation." The primary emphasis is
on operational procedul-es for single orcross-model evaluations of time series
models. This paper has nine authors. This cooperative effort reflects the complexity
of present-day models, since different aspects require specialized talents. With a
single paper, we have avoided a series of comments scattered throughout the
literature. This collaboration was made possible tirough a grant to the NBER
from the National Science Foundation; the grant funded a Conference on Econo-
metrics and Mathematical Economics, consisting initially of eight seminarswhich
addressed topics in this area. The seminar meetings generated papers and informal
memoranda which were integrated into a final paper. an earlier draft of which
was presented for critical review at the BrookingsModel Conference, February
11-12, 1972. Saul Hyinans and Harold Shapiro served as co-chairmenof the seminar
the final form of the article reflects their guidance of the seminar.
When there is still fundamental disagreement regarding a particular problem
in research, an article and a series of comments on it can serve to more clearly
define the major issues and point towards avenues of possible resolution. In this
case, a paper on match-merge techniques was presented atthe NBER Workshop
on the Use of Microdata in EconomicAnalysis. Benjamin Okner describes the
methodology used to obtain an artificial sample from two samples, each having
certain variables (X); one sample, from IRS, had another set (Y), and the second
sample from SEO had a third set (Z). In his comment, Christopher Sims presents a
theoretical analysis which is critical of the procedures used to obtaimit1ieX', Z)I
sample. 1-Ic notes that ineffect Okner haspostulated a regressionfunction relating the variables and thatproblems arise fromdefining groups incertainways Jon Peckobserves that explicitSpecilication ofthejointdistribtitioiis is anenormous task, and that heuses to be made of therculting sample haveto be considered before concludingthat the match-mergeprocedures are invalid.Edward Bud ii contrasts Okner's procedureswith hosetised bythe 011ice of BusinessEconomics; he makes specificreference to samplingclifkrences, matchingprocedures and the treatment of underreportingof income Okner,in his responsedescribes how the research tool has hceiiused; he stresse.s thatthe final test is howuseful the data base proves to be fortax analysis. It isdoubtllj; whether thelast word has been heard on this importanttopic of such criticalimportailce ineconomic and social analysis.
The theory of humancapital has manyknown and unknowngaps requiring new data and improvedConcepttial frameworksPaul 1iuh,na,,andTerence U'ales examine the "effects ofomitting mental abilityon both the shape ofthe age- earning profile, andon the differences betweenprofIles." Theyconclude that a whole set of correctionsare necessary to obtainunbiased estimates ofthe returnsto education Theirnote is part of theon-going research effortat the NBERon the determinants and eikctsof humancapital formation The note byWilliam Tv/erserves as an extendedannouncement of the Latin American Data Bankat the Universityof Florida. Theacquisition priorities described in thenote illustrate thetypes of choicesfacing all datalibraries. This note is one of acontinuing serieson data banks andcomputer centersaround the coun try.
The next issueof theAnnals willhe devotedto papers oncontrol theory presented at a workshopsponsored by theConference on theComputer in Economic and SocialResearch In thecurrent issue, there isan announcementon the CharterMeeting of thisconfrdnce which wi:be on the CurrentPopulation Survey Personsinterested in theactivities of thenew conference seriesShould contact Neville Beharie,Assistant Editor ofthis journa' In the Editor'sCorner of the April1972 issue oftheAnnals of Economican/ Social Measu,e,ne,,tit wasreported that theConference on theRole of the Computer in Economicand Social Researchin Latin Americaheld in Cuernavaca, Mexico October2529, 1971,was funded by theNational ScienceFoundation and IBM. Althoughit is true thatthis conferencewas one of the Seriesof NBER conferences andworkshops on therole of thecomputer in economicand social research Supportedby the NationalScience Foundationand IBM, in thisspecific case special fundingprovided by the IBMWorld TradeCorporation,together
withresources provided bythe sponsoring
Colegio de Mexico, VargasFoundation andthe DiTellaInstitutefujl3,supported the conference Agrant to providethenecessary' support forcontinuingworkshops
on this generaltopic in LatinAmerica over thenext live years hasalso been made by the IBMWorld TradeCorporation
S.V.B.
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Annals of Economic and Social Measurement, Volume 1, number 3

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