Treasurer's Report (2004)

Econometrica, Vol. 73, No. 1 (January, 2005), 315–323



AUGUST 19, 2004


1. Introduction

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, at roughly 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 regular, 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 2000 and 2005 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, as well as investing in a complete redesign of the web site during 2003.1

The deliberate attempt to use all of these methods to stop the growth of the NW/ATR ratio eventually succeeded. Planned policies produced losses in the years 2000–2002 that totalled $467,275 and reduced the Society’s NW/ATR ratio from 1.37 at the end of 1999 to 0.57 at the end of 2002. Then a turnaround began, and the Soci- ety’s NW/ATR ratio is currently on an upward trajectory. The three consecutive years of losses in 2000–2002 were intentional and had virtually nothing to do with the decline in the U.S. stock market, since the Society moved most of its assets out of the stock market in the spring of 2000 and moved them back into the stock market during the spring of 2003 (see Table VII).

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