Econometrica, Vol. 72, No. 1 (January, 2004), 327–335
THE ECONOMETRIC SOCIETY ANNUAL REPORTS REPORT OF THE TREASURER
STOCKHOLM, SWEDEN AUGUST 19, 2003
FOR SEVERAL DECADES, the financial objective of the Econometric Society (ES) has been to maintain its ratio of net worth (NW ) to adjusted total revenue (ATR), that is, NW/ATR, equal to 50 percent. As capital gains on the U.S. stock market pushed up the NW/ATR ratio in the late 1990’s far above that 50 percent goal, the Society made regu- lar, prudent decisions to shift these gains from its NW to the welfare of its constituents, primarily by providing substantial travel grants to participants in its World Congresses, by suspending increases in membership dues over the past decade, by providing for an extra co-editor of Econometrica, by instituting a 50 percent increase in the number of pages printed in Econometrica in the year 2002 compared to the normal number of pages, and by making substantial investments in its web site, including creating an electronic Members’ Directory and online access to Econometrica for all ES members.1 Despite repeated decisions to raise costs and reduce revenue, the NW/ATR ratio reached a peak of 144 percent at the end of the year 2000, up from 64 percent at the end of 1991. This increase reflected both the American stock market boom of the 1990’s and the auditing requirement that unrealized capital gains must be recognized as revenue in the year in which they occur. Finally in 2000–2002 the Society incurred the financial losses that had been planned and that were necessary to reduce the NW/ATR ratio back toward the longstanding goal of 50 percent, and indeed the ratio at end of 2002 had declined to 66 percent (see Table III, line H).