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A tempest on a T-test: Rejoinder to Bruce Seaman
211 LETTERS
TO THE EDITOR
AND REJOINDERS
A TEMPEST ON A T-TEST: REJOINDER TO BRUCE SEAMAN
Roger A. McCain’ Bruce Seaman (2) did a workmanlike piece of researchand reported it in a style which was more than averagepleasing.I tried (1) to do as my sainted Grandmother taught me : make some constructive suggestions.Seaman,in a response(3) far longer than my comment, misconstrues and even distorts my suggestions,and in one instance distorts the context in a way which could be deceptive to a person not in attendance at the symposium. Let me dispose of that last one first. In ranking myself “with the philosophers” and “against the economists” I was speaking precisely to the papers which made up the symposium. Although Seaman cites Baumol and Bowen, Scitovsky and Galbraith as evidence that “it is a phoney dichotomy,” (3, p. 145) those eminent scholars were not at the symposium (and, of course, we were all the poorer for that). In fact, the economists and philosophers who spoke at the symposium were divided in just the way I described. The comment “that economists are inclined to trust the outcomes of the market . . .” (1, p. 135) was made from the floor, by another economist participant, in the informal discussion that followed Seaman’s paper. Seaman knows this and, at the time, I gathered that he agreedwith the comment. Second, my questions about Seaman’swork were substantive, not methodological. I would not opposean utility-maximizing ’ Roger A. McCain Philadelphia, Pa.
is Associate
Professor
of Economics
at Temple
University,
212
model if only it were a correct one. it is not at all conventional to make the payment for a service an argument of a direct utility function. Seaman’s error---and it is an error----would be apparent if he were talking about potatoes rather than art. It is as if he were to say that people are willing to pay for potatoes because they like giving money to potato-sellers. I would have thought it was because they like potatoes. Seaman is not very clear on that: after defining T (2, p. 100) as a payment, he often talks as though T were a measure of cultural output. If other revenue sources are ignored, and output is measured in units of one dollar’s worth, then T may indeed be a measure of output. Perhaps that is what Seaman had in mind, but if so, he would have been well advised to say so. Anyway, it brings us up against another question which Seaman chooses to brush away: why is the total output, rather than family consumption, an argument of the family’s utility function? It is here that questions about public goods arise, but I will not belabor that point. (On pp. 111-l 13, which seem to have been added to the original paper since it was presented, Seaman seems to abandon that assumption.) What difference does it make? The difficulty is that, if cultural output is a normal good complementary to education, we would expect the regression coefficients of education and income always to be positive. They are not, and Seaman grants that these results are “perverse” (2, p. 122) and seemingly anomalous (2, p. 118). He reasons one of these anomalies away simply by restating it: “this is a plausible finding if the demand for subsidies is not a monotonically increasing function of income.” This is tautology (2, p. 122). The plain fact is that Seaman’s estimates contradict his hypothesis, such as it is. In suggesting a modal choice interpretation and Weisbrod’s heterogeneity hypothesis (4), I was not motivated by methodol0~7, and still less by an aversion to utility maximization, which both of those approaches assume, as Seaman observes in one of
213 the two cases (3, p. 143). Quite the contrary. I was proposing two hypotheses, each of them consistent both with utility maximization and with Seaman’sestimates. I conclude, therefore, that a careful and detailed development of economic theory can, Seaman to the contrary, “help . . . in analyzing the cross-sectional behavior of communities . . .” (3, p. 148) or in other econometric odd-jobs. Perhaps there is a basic methodological point here after all, and it is that an hypothesis cannot “help . . . in analyzing” facts which contradict it. This minor point seemsto have escapedSeaman.
214
REFERENCES 1.
McCain, Roger A. ‘Comments,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer 1979), pp. 133-7.
2.
Seaman, Bruce, A. “Local Subsidization of Culture: A Public Choice Model Based on Household Utility Maximization,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer 1979) pp. 93-131.
3.
“Further Comments on Local Subsidization of Culture,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer, 1979) pp. 139-147.
4.
Weisbrod, Burton. The Voluntary Non-Profit Lexington, Mass: Lexington Books, 1977.
Sector.
TO THE EDITOR
AND REJOINDERS
A TEMPEST ON A T-TEST: REJOINDER TO BRUCE SEAMAN
Roger A. McCain’ Bruce Seaman (2) did a workmanlike piece of researchand reported it in a style which was more than averagepleasing.I tried (1) to do as my sainted Grandmother taught me : make some constructive suggestions.Seaman,in a response(3) far longer than my comment, misconstrues and even distorts my suggestions,and in one instance distorts the context in a way which could be deceptive to a person not in attendance at the symposium. Let me dispose of that last one first. In ranking myself “with the philosophers” and “against the economists” I was speaking precisely to the papers which made up the symposium. Although Seaman cites Baumol and Bowen, Scitovsky and Galbraith as evidence that “it is a phoney dichotomy,” (3, p. 145) those eminent scholars were not at the symposium (and, of course, we were all the poorer for that). In fact, the economists and philosophers who spoke at the symposium were divided in just the way I described. The comment “that economists are inclined to trust the outcomes of the market . . .” (1, p. 135) was made from the floor, by another economist participant, in the informal discussion that followed Seaman’s paper. Seaman knows this and, at the time, I gathered that he agreedwith the comment. Second, my questions about Seaman’swork were substantive, not methodological. I would not opposean utility-maximizing ’ Roger A. McCain Philadelphia, Pa.
is Associate
Professor
of Economics
at Temple
University,
212
model if only it were a correct one. it is not at all conventional to make the payment for a service an argument of a direct utility function. Seaman’s error---and it is an error----would be apparent if he were talking about potatoes rather than art. It is as if he were to say that people are willing to pay for potatoes because they like giving money to potato-sellers. I would have thought it was because they like potatoes. Seaman is not very clear on that: after defining T (2, p. 100) as a payment, he often talks as though T were a measure of cultural output. If other revenue sources are ignored, and output is measured in units of one dollar’s worth, then T may indeed be a measure of output. Perhaps that is what Seaman had in mind, but if so, he would have been well advised to say so. Anyway, it brings us up against another question which Seaman chooses to brush away: why is the total output, rather than family consumption, an argument of the family’s utility function? It is here that questions about public goods arise, but I will not belabor that point. (On pp. 111-l 13, which seem to have been added to the original paper since it was presented, Seaman seems to abandon that assumption.) What difference does it make? The difficulty is that, if cultural output is a normal good complementary to education, we would expect the regression coefficients of education and income always to be positive. They are not, and Seaman grants that these results are “perverse” (2, p. 122) and seemingly anomalous (2, p. 118). He reasons one of these anomalies away simply by restating it: “this is a plausible finding if the demand for subsidies is not a monotonically increasing function of income.” This is tautology (2, p. 122). The plain fact is that Seaman’s estimates contradict his hypothesis, such as it is. In suggesting a modal choice interpretation and Weisbrod’s heterogeneity hypothesis (4), I was not motivated by methodol0~7, and still less by an aversion to utility maximization, which both of those approaches assume, as Seaman observes in one of
213 the two cases (3, p. 143). Quite the contrary. I was proposing two hypotheses, each of them consistent both with utility maximization and with Seaman’sestimates. I conclude, therefore, that a careful and detailed development of economic theory can, Seaman to the contrary, “help . . . in analyzing the cross-sectional behavior of communities . . .” (3, p. 148) or in other econometric odd-jobs. Perhaps there is a basic methodological point here after all, and it is that an hypothesis cannot “help . . . in analyzing” facts which contradict it. This minor point seemsto have escapedSeaman.
214
REFERENCES 1.
McCain, Roger A. ‘Comments,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer 1979), pp. 133-7.
2.
Seaman, Bruce, A. “Local Subsidization of Culture: A Public Choice Model Based on Household Utility Maximization,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer 1979) pp. 93-131.
3.
“Further Comments on Local Subsidization of Culture,” The Journal of Behavioral Economics, Vol. VIII, 1 (Summer, 1979) pp. 139-147.
4.
Weisbrod, Burton. The Voluntary Non-Profit Lexington, Mass: Lexington Books, 1977.
Sector.