A personal tribute to Henri Theil

Journal of Agricultural and Applied Economics, 2003 by Mundlak, Yair

The work of Henri Theil, including a biographical account of his professional activity, has been well documented (see Baldev and Koerts). This footnote adds a personal account of my initial professional awareness of his work and reputation that goes back to the beginning of my empirical work in Israel after returning from my studies in Berkeley at the end of 1956. The first contact was his book on aggregation, which came out in 1954. This was followed later on by his article on specification error (1957) and various aspects of forecasting that came out in his 1958 book. That book and a series of articles made the term "Munich business test" a buzzword at the time. These works overlapped with my interests, and I found them to be pertinent and valuable.

At about the same time, I learned about the impact Theil was having on the profession. First it was from Yehuda Grunfeld, who had returned to the Hebrew University of Jerusalem from his studies at the University of Chicago somewhere around the end of 1957. He was in Chicago when Theil visited the Department of Economics during the 1955-1956 academic year. I heard a similar story years later from Irving Hoch. There are several subjects that come to mind that illustrate how his influence inspired other work: specification error and production function estimation, the virtue of aggregation, simultaneous equation, and production function estimation. Also, it seems that Theil was instrumental in importing Koyck's work on distributed lags to Chicago (see also Baldev and Koerts, chapter 4).

In the late 1950s and early 1960s, Theil was heading the Econometric Institute in Rotterdam, which was a little Mecca to young outstanding econometricians of the time. Arnold Zellner, Marc Nerlove, and Zvi Griliches, among others, spent time there. I stopped by in the summer of 1963 on my return to Israel from a sabbatical leave in the United States. Zvi Griliches, who was visiting the institute at the time, suggested that on my way I visit with Theil. This, I think, was the first time I had a discussion with Theil on subjects of common interest. Years later we overlapped at The University of Chicago, but that was a later stage, and our interests were evolving in different directions.

References

Baldev, R., and J. Koerts, eds. Henri Theil's contributions to Economics and Econometrics, Volume 1. Dordrecht, Netherlands: Kluwer Academic Press, 1992.

Theil, H. Linear Aggregation of Economic Relations. Amsterdam: North-Holland Publishing Company, 1954.

Theil, H. "Specification Errors and the Estimation of Economic Relations." Review of International Statistical Institute 25(1957):41-51.

Theil, H. Economic Forecasts and Policy. Amsterdam: North-Holland Publishing Company, 1958.

Yair Mundlak is Professor Emeritus, The University of Chicago and The Hebrew University of Jerusalem.