Principles of Engineering Economy. by Eugene L. Grant; Principles of Engineering Economy--Problems. by Eugene L. GrantReview by: B. A. ThresherJournal of the American Statistical Association, Vol. 34, No. 205 (Mar., 1939), pp. 229-230Published by: American Statistical AssociationStable URL: http://www.jstor.org/stable/2279206 .

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*BOOK REVIEWS 229

The author finds in fact that the spread between what the farmer gets for his cotton and the price it brings in Bombay scarcely pays the legitimate costs of marketing. The need for reform then is not to prevent excess profits of middlemen but to eliminate malpractices, such as inadequate price quo- tations in local markets, mixing, watering, disputes, and confusion in weigh- ing engendered by excessive competition and not the lack of it.

The real value of the book lies in the description of Indian cotton markets and marketing. Here the foreign reader finds himself wishing for more detail, more concrete material, some well-chosen photographs, and examples. The description of the local markets is the best. The major problems of marketing in India, as in America, have essentially the same causes-lack of knowledge and information about cotton and cotton marketing, small volume, and inade- quate organization. The discussion of cotton futures markets and especially of the Bombay market leaves much to be desired.

The chapter on cotton prices makes no contribution on that subject to an American audience of economists.

Nothwithstanding the defects pointed out, the book is a distinct contri- bution to the world's literature on cotton marketing.

A. B. Cox University of Texas

Principles of Engineering Economy, Revised Edition, by Eugene L. Grant. New York: The Ronald Press Company. 1938. xix, 431 pp. $3.75.

Principles of Engineering Economy-Problems, by Eugene L. Grant. New York: The Ronald Press Company. 1938. iii, 142 pp. $1.00. (In Combina- tion, $4.25). This comprehensive revision of a text already recognized as of high quality

calls less for detailed review than for some reflection upon the nature and scope of the subject of which it treats. Professor Grant has collected a rich variety of illustrative material from many fields of engineering. His long experience in teaching this subject is evident from the extent to which beginners' errors are anticipated. The result is a "how-to-do-it" book com- bining theoretical clarity with the salty flavor of practical life. Students who respond but feebly to the one may yet be lured by the other.

Engineering economy is the "cutting edge" of economic judgment as applied to a wide variety of investments in physical equipment. Such invest- ments are typically large for production rather than consumption purposes. Decisions about them usually constitute parts of a wider economic judg- ment, either by an entrepreneur or a governmental body. At the core of each problem of engineering economy lies a mathematical relationship, usually simple. This core of mathematical relationships could be expounded in a brief and rigorous treatise. Once a few basic concepts have been mas- tered, such as that of interest, depreciation, increment cost, capacity and load factor, the rest follows inevitably.

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230 AMERICAN STATISTICAL AssoCIATIoNS

The art of teaching the subject to engineering students is a different matter. Given time, experience, and industry, the theoretical basis can be presented in an illuminating manner through the medium of problems drawn from life. More difficult, because indeterminate, is the question of how far the assumptions of theory are to be left intact and unquestioned; or how far, on the contrary, their wider economic implications are to be examined. The nature of costs, the theory of interest, the complexities of demographic statistics, corporation finance-these are some of the problems which pre- sent themselves to the student who seeks to penetrate behind the opaque simplicity of the mathematical expressions for least cost, economic life, and the like.

Professor Grant has made an intelligent compromise, since a volume of the scope intended scarcely could follow out all these implications. As a practical treatise on "the lore of nicely calculated less and more" the book is unexcelled. Its chief danger is that the student who has mastered this segment should think he thereby has exhausted all that is profitable in the field of economics.

An accompanying volume of problems forms a valuable teaching aid. B. A. THRESHER

Massachusetts Institute of Technology

Psychology and the Motorist, by Herbert A. Toops and S. Edson Haven. Columbus, Ohio: R. G. Adams and Company. 1938. vi, 265 pp. $2.00. This volume adds to the voluminous literature of suggestions for solving

the traffic problem. An interview study is used as a point of departure, followed by criticisms and suggestions. The field covered includes accident statistics, the opinion of the driving public, the driver, the pedestrian, high- ways, city planning, signs, signals, parking, car construction, law enforce- ment, research, and plans and suggestions for ideal highways. This material is treated with a rather general and apparently intentional lack of considera- tion of the practical aspect.

After an introduction which pleads for the value of lay opinion, the authors launch into a discussion of accident records. It is held that in spite of poor records the accident prone driver can be identified. The suggestions of an analysis of the individual's chance of accident and of an index of driver skill in terms of actual driving habits on the road seem justified.

"What's Wrong with the Driver" discusses in quite acceptable fashion the role of judgments and perceptions in driving an automobile, and "The Driver at the Wheel" is a similar treatment of emotional reactions, habits, fatigue, attitudes, and other similar topics. "The Dangerous Pedestrian" suggests controlling or licensing pedestrians, although some of the practical aspects of pedestrian psychology are ignored. "Motives and Incentives" is essentially a plea that "reward is more promising than punishment." A

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