Table 2

Table 2.

Estimates of Consumption Function:
Houthakker-Taylor Model(1) with Annual Data(2)

Period	Stock Coefficient	SR-MPC	LR-MPC*	Intercept*	Rz	D.W.

1947-64: Reported by HT in 1970:	+1.33	0.580	0.980	-39.08	0.997	2.89
1947-64: Revised Data(3):	+0.662	0.640	0.920	8.89	0.990	1.51
1929-48(omit 1942-46)	+0.337	0.523	0.830	58.39	0.987	2.02
1947-72	+0.286	0.750	0.877	72.71	0.998	1.54

1948-70	-0.043	0.902	0.877	76.049	0.997	1.610
1948-71	-0.014	0.882	0.872	83.043	0.997	1.731
1948-72	-0.039	0.901	0.876	77.259	0.998	1.732
1949-70	-0.040	0.901	0.870	89.917	0.997	1.562
1949-71	-0.028	0.890	0.866	98.055	0.997	1.731

1949-72	-0.050	0.911	0.872	86.789	0.998	1.666
1950-67	-0.020	0.908	0.884	59.795	0.996	1.484
1950-68	-0.025	0.915	0.889	50.804	0.997	1.669
1950-70	-0.111	0.965	0.874	83.786	0.997	1.579
1950-71	-0.082	0.947	0.869	92.706	0.998	1.753

1950-72	-0.114	0.964	0.874	82.452	0.998	1.711
1951-68	-0.060	0.951	0.871	67.883	0.997	1.667
1951-69	-0.001	0.898	0.897	35.369	0.997	1.627
1951-70	-0.143	0.998	0.868	97.733	0.997	1.620
1951-71	-0.122	0.989	0.863	109.413	0.997	1.816

1951-72	-0.153	1.008	0.870	93.729	0.998	1.741
1952-70	-0.109	0.968	0.862	113.207	0.997	1.807
1952-71	-0.072	0.933	0.859	118.913	0.997	2.030
1952-72	-0.129	0.984	0.867	102.286	0.998	1.889
1953-73	-0.136	0.977	0.859	123.104	0.997	1.853

1953-71	-0.125	0.970	0.854	133.917	0.997	2.056
1953-72	-0.163	0.993	0.863	114.295	0.998	1.928
1954-71	-0.251	1.044	0.849	157.440	0.997	1.979
1954-72	-0.324	1.076	0.857	140.505	0.998	1.900
1955-72	-0.426	1.159	0.857	152.856	0.997	1.884

*For formulas used for these computations, see text.

l see text for explanation of why these and similar econometric tests of traditional theory or estimates of consumption functions are inconclusive-regardless of whether the estimated SR-MPC is greater or less than the estimated LR-MPC.

2 Quarterly data generally yielded SR-MPCs less than LR-MPCS. See note 1.

3 Revised Department of Commerce data available

Sources: Business Statistics, 1971; Survey of Current Business, July 1972 and March l9 73;

Houthakker Taylor, Consumer Demand in the United States, (Cambridge: Harvard University Press, 1970), p. 283.