The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Oct, 1955, Volume 23, Issue 4
https://doi.org/0012-9682(195510)23:4<400:CAREWT>2.0.CO;2-0
p. 400-416
Edwin Kuh, John R. Meyer
This paper examines the influence of ratio transformations on correlation and regression estimates. After a discussion of the "spurious" ratio correlation problem necessary and sufficient conditions are adduced for the correlation between two series with a common denominator to equal the partial correlation between numerator series with the deflating variable's influence held constant. So far as regression coefficients are concerned, it is shown what conditions must be fulfilled to obtain best linear unbiased least squares estimates when the data are in ratio form. These conditions will be more frequently fulfilled with cross-section than with time series data. Some empirical properties of Chenery's test of the capacity principle are then re-evaluated in light of these technical conditions. Chenery's work illustrates the point that ratio transformations on time series usually require circumspection when the data are cross-sectional.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
