Review: The Sociological Economics of Gary S.

Becker
Reviewed Work(s): The Economic Approach to Human Behavior. by Gary S. Becker
Review by: Duncan MacRae, Jr.
Source: American Journal of Sociology, Vol. 83, No. 5 (Mar., 1978), pp. 1244-1258
Published by: The University of Chicago Press
Stable URL: https://www.jstor.org/stable/2778194
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 Review Essay: The Sociological Economics
of Gary S. Becker1

The Economic Approach to Human Behavior. By Gary S. Becker. Chicago:

University of Chicago Press, 1977. Pp. vi+314. $17.00.

Duncan MacRae, Jr.

University of North Carolina at Chapel Hill

The comparison between economic and sociological perspectives on human

action has long been a fruitful one. Since Weber's studies of the social back-
ground of economic activities and Parsons's (1937) criticism of economic
theories, sociologists have recognized the topic as significant. More recently,
however, a number of economists have applied their analytical tools to the
study of problems related to sociology. Sociologists have too often ignored
these developments, which might constitute both a challenge and a source of
fruitful innovations.
An outstanding contributor to these developments is Gary S. Becker, of
the University of Chicago, whose studies in various fields relevant to soci-
ologists have cumulated over two decades and are brought together selec-
tively in The Economic Approach to Human Behavior. His role has resembled
that of a theoretical physicist elaborating elegant theoretical schemes, draw-
ing precise inferences from them, and testing them with data gathered
largely by others. The scope and confidence of his analysis are suggested by
the following statement: "The economic approach is a comprehensive one
that is applicable to all human behavior, be it behavior involving money
prices or imputed shadow prices, repeated or infrequent decisions, large or
minor decisions, emotional or mechanical ends, rich or poor persons, men or
women, adults or children, brilliant or stupid persons, patients or therapists,
businessmen or politicians, teachers or students. The applications of the
economic approach so conceived are as extensive as the scope of economics
in the definition. .. that emphasizes scarce means and competing ends"
(p. 8).

Becker's Approach

Becker has applied the reasoning of microeconomics to social phenomena,

extending it into the realm of "nonpecuniary motivation" ([1957] 1971a,

1 This review essay is a revised version of a paper presented at the annual meeting of the
American Sociological Association, New York, September 1976. The term "sociological
economics" refers to the study of social phenomena by means of economic concepts and
methods. In compound terms of this sort, as sociologists will recognize, the second word
typically indicates the base discipline and the first the subject matter under study

Permission to reprint this review essay may be obtained only from the author.

1244 AJS Volume 83 Number 5

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 Review Essay

p. 11). Microeconomics is concerned with "the system of market prices which

strikes an equilibrium among people's tastes for different goods and the
scarcities of total resources that can produce them" (Samuelson 1970, p. 357).
And as Becker (1971b, p. 2) describes the field, "Our main interest. .. is in
the market behavior of aggregations of firms and households. Although im-
portant inferences are drawn about individual firms and households, we try
mainly to understand aggregate responses to changes in basic economic
parameters like tax rates, tariff schedules, technology, or antitrust provi-
sions." He summarizes the approach, as applied to human behavior in gen-
eral, thus: "The combined assumptions of maximizing behavior, market
equilibrium, and stable preferences, used relentlessly and unflinchingly, form
the heart of the economic approach as I see it" (p. 5).
In a perfectly competitive market under certain conditions, such as those
of scarcity (increasing costs or diminishing returns), given tastes, and
technology, the interaction of firms and households can be shown to lead to
a general equilibrium, with determinate prices and allocation of factors of
production to productive processes. The mathematical statement of the con-
ditions and nature of this general equilibrium was first presented by Walras
(1874). But the special case of "partial equilibrium theory," more frequently
used, considers a subsystem of the economy such as the market for a single
commodity, under the assumption that other variables do not vary; the
familiar diagram of supply and demand curves is of this sort.
The responses of a competitive market to exogenous changes are estimated
by the method of "comparative statics": the configuration of the equilibrium
is considered before and after the exogenous influence, and the nature of the
resulting change is inferred. The length of time required for the resulting
change to occur, and the detailed processes by which it occurs, are not
usually investigated.
The theory of market equilibrium also has implications for the choice of
desirable policies. A perfect market not only has a point of equilibrium but
at this point provides a Pareto-efficient allocation of factors of production
and of goods to consumers (Bator 1957). If we accept the Pareto criterion of
desirability, we can then identify instances of "market failure," when certain
assumptions of the model fail to obtain (as in the case of externalities and
collective goods), and corresponding possibilities of remedial action. Econ-
omists sometimes go beyond the Pareto criterion and formulate "social wel-
fare functions" as criteria for choice among policies; Becker does so in his
work on crime. This valuative economic approach, together with a model of
the system, leads economists to propose new policies (vouchers, effluent
charges, fines, bonds for enforcers, new voting systems) as well as to criticize
existing ones (e.g., rent control, excise taxes). But as Becker pointed out in
an early essay (chap. 3), government behavior may also involve imperfec-
tions as great as those of the market.
The aspects of microeconomics, and of other fields on which Becker draws,
have a diversity that is not adequately suggested by my brief description of
the field. He draws on a rich mathematical literature related to other fields
of economics. The reader who wishes to follow his discussions in detail should

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American Journal of Sociology

be prepared to deal with problems of constrained maximization of functions

of several variables; partial derivatives and Lagrange multipliers appear
frequently.
I shall summarize the selections in this volume, supplementing them by
reference to Becker's other work. The topics will be rearranged in sequence
from relatively simple to complex in terms of the sociological issues involved.
I consider first nonmarket inputs into market processes, then aspects of social
structure, and finally crime and punishment. For each of Becker's topics of
analysis, I shall consider related sociological problems, selected findings,
policy recommendations (if made), and suggested lines of sociological
research.

Nonmarket Inputs

Human capital.-An innovation in Becker's work has been to consider

consumer or household activities that are not directly involved in the market.
One such activity is the use of time and goods not for consumption but for
the development of later earning capacities. The production of "human
capital" in this way is closely related to social stratification. For example,
the model of the competitive market contains a much more precise variant
of the functional theory of stratification. Factors of production are rewarded
in terms of prices associated with their marginal productivity. Thus if we
compare the productivity of persons with various sorts of skills, those whose
skills permit greater marginal productivity are rewarded more in this sort
of market. ". . . Some persons earn more than others simply because they
invest more in themselves" (Becker 1975, p. 231).
The individual's calculation as to when to devote resources to his own
human capital leads to variation in this investment over the life cycle. In-
vestment at earlier ages allows returns to be realized over a longer period
(p. 123). Variation of wage rates with age leads to an inverse variation in
time devoted to consumption (pp. 118-21, 142), paralleling variations
among income groups. The choice whether to receive earnings now or to
postpone them in order to receive greater earnings later is seen in the
economic approach as strictly a calculation of expected gain, discounted for
future years. It is not seen as resulting from values characteristic of different
age groups, social classes, or ethnic groups. Thus Becker states (p. 5) that
preferences are assumed not "to be very different between wealthy and poor
persons, or even between persons in different societies and cultures."
Becker explains by the theory the observed fact that age-earnings profiles
are steeper for the skilled and educated (Becker 1975, p. 81). Such changes
in earnings during one's lifetime may be related by sociologists to social
mobility within a given occupation or to the effects of human capital on
mobility between occupations. He also deduces that groups with a higher
expectation of participation in the labor force tend to have a higher expecta-
tion of return on investment in education. Thus women are less likely to

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 Review Essay

continue schooling than men, but nonwhite women, who have a higher ex-
pectation of labor-force participation, are more likely than white women to
continue from high school to college (1975, pp. 178-79).
When investment in human capital is considered by a firm for its em-
ployees or by a society for its members, the costs of this investment must be
weighed against the returns. The opportunity costs of training must include
"the time that a person spends on his training, time that could have been
used to produce current output" (1975, p. 19). And a firm that provides on-
the-job training must calculate its expected losses from job turnover of those
whom it has trained. If the training involves general or transferable skills,
there are presumably gains to other firms and no loss to society; but if the
skills are specific to the first firm, there is a social loss from job turnover.
Such losses might well be considered if sociologists were to make judgments
as to the optimum rate of social mobility.
The contribution by education to general social benefits may be under-
estimated if only the private returns and not the possible externalities are
counted. But it might be overestimated if "college graduates earn more
partly because their productivity was systematically overestimated," in
which case "private returns would tend to be larger than social ones"
(Becker 1975, p. 195). This problem is closely related to that of credential-
ism, which has been the subject of sociological research. Becker also suggests
that further research is desirable on "the quantitative effects of different
kinds of ability on earnings and productivity" (1975, p. 235).
Another valuative question concerns the perpetuation of families' income
advantages through their ability to finance their children's education (Becker
1975, p. 79). Alternative policies include guaranteeing education with sub-
sidies-which might not be efficient-or devising means whereby less affluent
students could pay for it from their subsequent earnings-means which face
the problem as to whether collateral could be offered (1975, p. 80).
A major potential contribution by sociologists to the analysis of human
capital lies in the measurement of the capacities that are produced by such
investment. Whether it be capacities for production or for consumption,
actual skills or social labels, cognitive abilities or attitudinal changes,
capacities for private gain or for contribution to the good of others through
public action-all are topics slighted by the economic approach, which
might be illuminated by direct measurement. These and other possibilities
for measurement will be summarized in table 1.
The allocation of time.-A more complex analysis of the use of time and
goods for nonmarket purposes is provided by "the new theory of consumer
behavior" (chap. 7). In this theory, households are seen as not merely pur-
chasing goods in the marketplace, but are "assumed to combine time and
market goods to produce more basic commodities that directly enter their
utility functions" (p. 91). Examples are "the quality of meals, the quality
and quantity of children, prestige, recreation, companionship, love, and
health status." These commodities "are not marketable or transferable

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American Journal of Sociology

among households" (p. 207).2 Preferences for these commodities are assumed
to be more nearly invariant than preferences for market goods, with respect
to time and individual differences (pp. 5, 145 n.).
Becker'introduces this notion in "A Theory of the Allocation of Time"
(chap. 5). In place of the customary budget constraint on consumer expendi-
ture, based on total income, he substitutes the more general notion of "full
income," the total money income that would be "achieved if all the time
available were devoted to work" (p. 93). This potential income-measured
in monetary terms but devoted to achieving both monetary and nonmone-
tary returns-is then the basis of rational allocation by the consumer.
Related sociological problems include the study of time budgets, but as
Becker points out (p. 114), a theoretically guided approach would gather
information simultaneously on the "expenditure" of both money and time,
which are interrelated. Time is assumed to be exchanged for money in terms
of the wage rate, but sociologists might also examine the conditions under
which an individual places a given value on time. Variations among indi-
viduals in their valuation of time relate many of Becker's findings to the life-
styles of different social classes. As wage rates increase, the value of time
taken from earning is greater, though unearned income does not have this
effect. One consequence of increased wage rates, relative to the prices of
goods, is to make people more economical of time and less so of material
goods; these are also features of America in contrast to poorer countries (pp.
105, 109-10).
Becker's analysis of "leisure" leads him to substitute for this concept a
theoretically more relevant notion-that of "unproductive and time-inten-
sive commodities" (p. 104). Various uses of time can in fact be arrayed on a
continuum according to their contribution to consumption and to income.
The relative contributions of time (foregone earnings) and of expenditure to
various forms of "leisure" also vary, and corresponding variation in the
effects on them of changes in wage rates or prices can thus be expected (p.
100). This refinement and modification of a concept drawn from everyday
usage is a frequent feature of scientific advance. Schooling itself, even if
primarily a contribution to later earnings, can also contribute to household
productivity, and Michael (1972) has estimated the magnitude of this latter
return (p. 143).
Becker draws few policy conclusions from his analysis of the allocation of
time. One may be that queuing, a form of allocation of resources that may
promote equity more than do prices, nevertheless produces social costs,
"because time is a cost to demanders, but is not revenue to suppliers" (p.
112 n.). We shall see that he makes a similar observation with respect to
imprisonment of offenders as an unproductive use of their time, suggesting
fines instead.
Fertility.-Becker applied an early version of the "new theory of consumer

2 The categorization of "basic commodities" parallels efforts by social scientists to list

basic human motives, such as W. I. Thomas's "four wishes" and other statements of
human needs.

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 Review Essay

behavior" to the analysis of fertility in 1960 (chap. 9). In this analysis, the
family is treated as a productive unit, but the internal structure of that unit
is not yet explored. Children are treated as "durable consumer goods" (p.
169); it is assumed that expenditures on children may be devoted partly to
their number and partly to their "quality," defined by their expense (p. 173)
rather than by any directly measured characteristics. As for "almost all
other consumer durables, such as cars, houses, or refrigerators," families are
expected to "purchase more units as well as better quality units at higher
income levels, with the quantity income elasticity usually being small com-
pared to the quality elasticity" (p. 174). In these terms he analyzes the rela-
tion between fertility and income.
The applicability of this theory depends on the spread of contraceptive
knowledge, making the production of children controllable at less psychic
cost. Becker shows that for subgroups of the American population who are
more likely to plan their families, fertility increases with income. For the
population in general, the observed inverse relation between fertility and
income was narrowing over time, presumably due to increases in contracep-
tive knowledge; and the relation was positive or less negative for number of
children desired, in comparison with actual numbers of children. Birthrates
were related to business cycles but responded less to these cycles than did
consumer durables (p. 187). Becker provides a plausible account of this
difference in terms of the measurement of numbers of children and not their
quality, the spreading of expenses for children over a longer period than
those for consumer durables, and other theoretically relevant variables. In
a subsequent article with Lewis (chap. 10), he analyzes the relative response
of quantity and quality of children to change in income and prices, relating
these to increases in the education of mothers and to advances in birth-
control knowledge (p. 200).
He also considers the allocation of time as an influence on the relation be-
tween fertility and income. Over and above consideration of the quality of
children, "one other factor that may be more important, however, is the in-
crease in forgone [sic] costs with income. Child care would seem to be a time-
intensive activity that is not 'productive' (in terms of earnings) and uses
many hours that could be used at work. Consequently, it would be an earn-
ings-intensive activity, and our analysis predicts that its relative price
would be higher to higher-income families." He presents additional evidence
that this may be the case (p. 106).

Social Structure

The topics treated so far involve individuals who make choices without con-
sidering their relations to others. Even the analysis of fertility ignores inter-
personal relations, treating the family rather as a unitary decision-making
entity. Another set of Becker's writings, however, deals with activities in
which the actor explicitly considers others.
Discrimination.-The first of these is The Economics of Discrimination

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American Journal of Sociology

(excerpted in chap. 2), in which he considered the effects on markets that

would occur if participants placed a value on not associating with other per-
sons having given characteristics. He defines discrimination as "the use of
nonmonetary considerations in deciding whether to hire, work with, or buy
from an individual or group" (Becker [1957] 1971a, p. 11). Here, as in the
case of "leisure," he modifies a customary definition in favor of one that
better fits the theoretical scheme. He dismisses notions of inaccurate per-
ception or stereotypes as not having a precise logical relation to market de-
cisions affecting productivity. An employer, then, "faced with the money
wage rate ir of a particular factor . .. is assumed to act as if ir(l + d) were
the net wage rate," where di is his "discrimination coefficient." Similar addi-
tive coefficients are introduced for employees and consumers ([1957] 1971a,
pp. 14-15). In the case of "nepotism" the coefficient is negative, anticipating
a possible symmetrical treatment of positive social relations.
Becker finds that when discrimination by one group against another is in-
troduced into a competitive market, both groups lose (p. 18). When dis-
crimination occurs, minorities suffer more than majorities. And when a
minority tries to retaliate by counterdiscrimination, it loses still more (p. 26).
The overall effects of particular tastes for discrimination depend not
simply on individual tastes but on the configuration of the market. For
example, if the relative supply of two groups (N and W) changed, the result-
ing market discrimination would change even though individuals' coefficients
of discrimination did not. The extent of market discrimination in competitive
industries is affected by the dispersion of the distribution of individual co-
efficients of discrimination; in monopolistic industries, on the other hand,
only the median coefficient of discrimination matters (Becker [1957] 1971a,
pp. 43-47).
Analyzing data on income, schooling, and racial proportions for Southern
SMAs in 1949, Becker concludes that "the proportion of non-whites in a
SMA does not seem to have an important effect on tastes for discrimination
that operate through the market." But "since most education is publicly
administered, ... in the South political discrimination against non-whites
is positively associated with their relative number" ([1957] 1971a, p. 126).
He also estimates from economic data that "individuals in the South appear
to have had, on the average, slightly less than twice as much taste for dis-
crimination as those in the North" ([1957] 1971a, p. 121). Conceivably, if
sociologists formulated survey questions in terms that would fit Becker's
model, they could make independent estimates of such ratios.
From a sociological point of view, it is important to measure directly the
variables whose effect Becker measures only indirectly through market be-
havior. Studies of "social distance" and of intergroup attitudes should throw
light on these same questions, especially if designed so as to refer to monetary
trade-offs. Further research might also test whether the coefficients d, enter
in additive, multiplicative, or some other form.
Social interactions.-Becker's "theory of social interactions" (chap. 12)
extends the model of the chooser to include possible changes that he may
produce in the characteristics of other persons or their relations to himself.

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 Review Essay

A central innovation of this theory is the notion of "social income," which

parallels that of "full income" in the allocation of time. This is "the sum
of [one's] money income and the value to him of his social environment,"
the latter being defined in terms of "characteristics of other persons" (pp.
256-57), including the utilities (in monetary units) that he receives from
others' welfare or diswelfare.
Interesting inferences from the theory concern the interactions of indi-
viduals with a social or political system that counteracts or complements
their efforts. For example, stratification depends on the extent to which
income or wealth is transferred selectively from one generation to the next.
But according to Becker's model, parental expenditures on their children
may vary far more with parents' income than do the children's incomes
themselves. "Indeed, contributions would be more responsive to parental
income the stronger are the basic forces producing mobility because parents
attempt to offset these forces" (p. 273). Similarly, parents will adjust their
"bequests" (including gifts and transfers to children for education) to com-
pensate for governmental efforts to alter the income distribution. Thus
"increased taxes on future generations would be matched by increased be-
quests to them," but "increased public investment in education would be
matched by reduced private investment in education" (p. 267).
An interesting theorem predicts the behavior of members of a family in
the presence of one member who "cares sufficiently about other members to
be the head.... Sufficient 'love' by one member leads all members by 'an
invisible hand' to act as if they too loved everyone" (p. 270). Similarly, a
charitable person and the recipients of his charity form a synthetic "family"
each of whose members is "partly 'insured' against catastrophes because
all other members, in effect, would increase their giving to him until at least
part of his loss were replaced. Therefore, charity is a form of self-insurance
that is a substitute for market insurance and government transfers. Pre-
sumably, the rapid growth of these latter during the past 100 years dis-
couraged the growth of charity" (p. 274). He applies this theorem to the
behavior of altruistic individuals with regard to their genetic fitness (chap.
13), noting that altruism produces effects on recipients' behavior which may
have been neglected in the sociobiological literature (p. 293).
He also derives hypotheses as to the relations of crime to income. Crimes
against persons are taken as examples of envy or malice and considered
"predatory" as distinguished from crimes against property, which may be
more economically motivated in the conventional sense. He concludes that
a rise in one's own income relative to that of others would reduce these
"predatory expenditures," while a general increase in incomes would be less
likely to have such an effect; the data seem to bear out this expectation (p.
278).
The research possibilities suggested to a sociologist by this theory are very
fundamental. If Becker can obtain results of such interest and diversity
without directly measuring the social bonds and configurations that consti-
tute social structure, how much more powerful might be the results with
such measurements! Social bonds within the family can vary among his-

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American Journal of Sociology

torical periods and stages in the life cycle, and these variations should have
effects of the sort Becker considers. Bonds outside the family also affect
economic behavior. A combination of Becker's analysis with the detailed
measurement characteristic of sociology should thus facilitate a more com-
plete delineation of social structure and provide an opportunity to test
hypotheses concerning that structure.
Marriage.-Becker's "theory of marriage" (chap. 11) deals not with social
structures as given but with their formation. He approaches the problem of
mate selection from the viewpoint of the equilibria of the marriage market-
a market that does not involve monetary exchange. In this market, as in
any other, the behaviors and choices of individuals depend not only on their
own preferences but also on the entire configuration of opportunities that
are provided to them by the choices of others. Thus, "the marriage market
chooses not the maximum household commodity output of any single
marriage but the maximum sum of the outputs over all marriages, just as
competitive product markets maximize the sum of the outputs over all
firms." But Becker stresses "that the commodity output maximized by all
households is not to be identified with national output as usually measured,
but includes conversation, the quantity and quality of children, and other
outputs that never enter or enter only imperfectly into the usual measures"
(p. 216).
Diverse types of inequality result from the operation of the marriage mar-
ket. "Positive assortive mating. . . increases the inequality in traits, and
thus in commodity income, between families." But Becker goes on to point
out that "the effects on inequality in commodity and money incomes may
be very different; indeed, if wage rates, unlike nmost other traits, are nega-
tively sorted, assortive mating would reduce the inequality in money earn-
ings and increase that in commodity income" (p. 241).
Other conclusions deal with the likelihood of marriage. The principal com-
modity for which marriage provides a gain through complementarity of in-
puts is "own children"; "Hence, persons desiring relatively few or low-
'quality' children either marry later, end their marriages earlier, or do both"
(p. 212). The likelihood of marriage is also influenced by income: "Our
analysis predicts that a rise in property income, necessarily, and a rise in
wage rates, possibly, increase the incentive to marry." Even though the
data appear to contradict this prediction, "when years of schooling and a
few other variables are held constant, higher-wage persons appear to marry
earlier than others" (p. 213). In addition, higher wage rates for women, rela-
tive to those for men, decrease the incentive to marry, as they would lead to
a decrease in the net productivity of marriages. Cross-sectional data on
American states support this inference (p. 214).
A second set of conclusions deals with the conditions for assortive mating.
Becker concludes that "the association of likes is optimal when traits are
complements and that association of unlikes is optimal when they are sub-
stitutes, . .. since high values of [a given trait] reinforce each other when
they are complements, and offset each other when they are substitutes"
(p. 218). He first considers the case in which males (M) and females (F)

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 Review Essay

differ only in market wage rates, and concludes (with the aid of empirical
evidence) that "a negative correlation between [wages of M and F] maxi-
mizes total output because the gain from the division of labor is maximized"
(p. 220). This conclusion runs counter to some observed positive correla-
tions between spouses' wage rates. But further analysis suggests the possi-
bility that inclusion of wage rates for wives not in the labor force might sup-
port the inference (p. 224). For traits that raise nonmarket productivity, in
contrast with market productivity, Becker suggests that they are comple-
mentary between spouses and therefore should be expected to be positively
associated (p. 222).
A third type of conclusion concerns the influence of the marriage market
on intrafamilial allocation of "output" between spouses (p. 231). The theory
"does not take the division of output between mates as given, but rather
derives it from the nature of the marriage market equilibrium. The division
is determined here, as in other markets, by marginal productivities, and
these are affected by the human and physical capital of different persons,
sex ratios, that is, the relative numbers of men and women, and by some
other variables" (p. 233).
The allocation of output within the family is modified, however, by the
possibility that spouses care for one another. Caring (i.e., interdependent
utilities) induces transfers within the family and reduces the effects of the
external market on the resulting internal distribution of output (p. 235).
But "output is generally less divisible between mates in marriages with car-
ing than in other marriages because caring makes some output a family com-
modity, which cannot be divided between mates. One implication of this is
that marriages with caring are less likely to be part of the optimal sorting
than marriages without caring that have the same total income (and thus
have a greater total output)" (p. 238).
Although Becker's model of marriage formation is potentially very fruit-
ful, it also contains a limitation that will be conspicuous to sociologists. The
role of "caring" in the formation of marriages is taken as that of a preference
fixed in advance; this limitation of the microeconomic approach seems un-
realistic.

Crime and Punishment

From a sociological perspective, the creation of a social structure such as a

marriage involves the creation of social norms, which include inter alia the
change of preferences. The apprehension and punishment of criminals is
similarly intended to influence preferences by instituting or maintaining
norms. Becker's analysis of crime and law enforcement, however, departs
conspicuously from the sociological perspective; it assumes that the only
effect of law enforcement on potential criminals is to change the situation
in which they operate by altering the effective prices placed on various ac-
tivities. Within this perspective, Becker deals with both positive and valua-
tive questions: how enforcement actually occurs and how it should be con-
ducted.

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American Journal of Sociology

He formulates a loss function L (a negative social welfare function) de-

pending on the net damage to society, the cost of apprehension and con-
viction, the social cost of punishment, and the supply of offenses. The two
decision variables that may be altered from one policy to another are taken
to be the degrees of certainty p and severityf of punishment. "Their optimal
values are found by differentiating L to find the two first-order optimality
conditions.. ." (p. 51). From the resulting equations Becker again draws
interesting conclusions, including the possibility that under some conditions
the authorities would increase the severity of punishment while decreasing
its certainty, thereby hoping to provide the same deterrent effect at smaller
cost.
Becker also deduces that as the marginal damages per additional offense
increase (as from one crime to another), "the optimal values of both p andf
would increase" (p. 55). He shows that the actual severity and certainty of
punishments for various crimes vary in the way expected (p. 57). He also
advances a plausible argument to explain "why the secular improvement in
police technology and reform has gone hand in hand with a secular decline
in punishments" (p. 58).
A policy proposal issues from consideration of the effects on the number
of offenses of changing p and f: "the results . .. imply that . .. the total
loss would be reduced by 'charging' lower 'prices'-that is, lower p's and f's
-in markets with lower elasticities." This conclusion corresponds to the
allocation of resources to uses where they are more effective. Becker con-
cludes that this principle is manifested in the giving of lower sentences for
unpremeditated crimes, the perpetrators of which would be "relatively un-
responsive to the size of punishments" (p. 59). But his conclusion is based
on the elasticities of response, not any difference in possibilities of learning.
A major policy conclusion is that fines should be used wherever feasible.
Becker notes that "probation and institutionalization use up social resources,
and fines do not, since the latter are basically just transfer payments, while
the former use resources in the form of guards, supervisory personnel, pro-
bation officers, and the offenders' own time" (p. 63). Moreover, "fines pro-
vide compensation to victims," as other sorts of punishment do not (p. 64).
In addition to testing the propositions deduced by Becker, sociological re-
search on this topic might well pursue two courses: (1) the measurement of
variables that Becker leaves implicit or measures only indirectly, including
social welfare functions; and (2) the development and testing of models in
which changes of preference (for or against crime at given prices) are in-
cluded as endogenous and directly measured.

Microeconomics and Sociology

Becker's analyses demonstrate the value of economic reasoning over a wide

range of sociological topics. But sociologists will ask whether the detailed
assumptions of the analyses are true. Microeconomics ignores the changes
of preference that sociologists believe to occur through communication,

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 Review Essay

socialization, and social control. The microeconomic model is sparse and

austere (and thus parsimonious), abstracting away from the rich diversity
of cultural, historical, and social-structural differences that sociologists are
accustomed to stress. It is static-a problem to which economists have re-
sponded by developing macroeconomics. But even if it should hold true only
under limited conditions, it has advantages in its elegance, precision, and
verifiable implications as compared with nonmathematical sociological
theories.
Measurement.-A major question concerning the truth of the microeco-
nomic model is whether the individual units in the economy do in fact maxi-
mize as they are assumed to do. The question here is not whether they maxi-
mize material things-Becker's treatment is far more general-but what,
when, and how much they do maximize. Most sociologists will be inclined
to go directly to the persons constituting these units, observe their behavior,
and ask them questions about their motives and their perception of the
world. The approach of Herbert A. Simon and his co-workers to the decisions
of the firm illustrates such an effort to be accurate in detail, and has led to
the notion of "satisficing" rather than maximizing. In a review of the litera-
ture on this topic, Cyert and Hedrick (1972) suggest that most economists
have judged the actual process of organizational decision making to be ir-
relevant and have simply adhered to the dominant model of maximization.
They state that "the problem is clearly difficult, but we wonder whether
economics can remain an empirical science and continue to ignore tne actual
decision-making processes of real firms" (1972, p. 409).
A model with the power and accomplishments of the microeconomic model
will thus not be discarded easily, even if the process of individual maximiza-
tion should obtain only in a general fashion. The processes by which scientific
paradigms resist change (Kuhn 1970) are well exemplified in this case. The
maximizing model may also be defended on the ground that similar behavior
can result from a variety of motivations. Becker, for example, postulates
impulsive or random behavior (chap. 8) and shows that, because of the con-
straint of scarcity, negatively inclined demand curves result from these as-
sumptions as well as from rational behavior.
Another aspect of the economic paradigm, however, may be clearly more
of a liability than an asset: the restriction to market data rather than survey
data. Becker justifies the use of data provided by the market, as contrasted
with direct reports of motivation by respondents, in this way: " . . . The
economic approach does not assume that decision units are necessarily con-
scious of their efforts to maximize or can verbalize or otherwise describe in
an informative way reasons for the systematic patterns of their behavior.
Thus it is consistent with the emphasis on the subconscious in modern psy-
chology and with the distinction between manifest and latent functions in
sociology" (p. 7). Becker's theories thus contain numerous unmeasured vari-
ables, most of which center about individuals' choices: indifference curves,
elasticities, utilities, and their dependence on other variables. If there is to
be a synthesis between the two approaches-and it would be of immense

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 American Journal of Sociology

value-it must include a contribution by sociologists and others to the direct

measurement of these variables.
Throughout this review I have referred to variables that can be measured
more directly by sociologists; these are summarized in table 1. Each of the
topics I have reviewed involves one or more significant nonmarket variables.
While Becker's analyses typically make inferences about these variables from
market data, or other observables related to them, sociologists can also
measure them directly. Three types of variables seem particularly appropri-
ate to measure: (a) characteristics or behaviors of individuals (skills, time
budgets, production); (b) trade-offs or monetary valuations made by the
individual (evaluations of time, of basic commodities, of associating with
others); and (c) changes of preferences. A review of my previous discussion
together with table 1 will show that these measurements can be central to
Becker's theories as well as interrelated with one another.
Policy analysis.-The measurement of trade-offs between values is im-
portant not only for testing Becker's models but also for the analysis of
policy choices. Insofar as individuals' preferences are our basis for judging
the merits of policies, we need to ascertain them; and if external effects of
market processes are to be estimated for decisions and planning, we need to
measure them in quantitative terms. Attitude measurement in terms of com-
parison between objects in which the individual is interested, as Coleman
(1957) once suggested, is relevant for these purposes.

TABLE 1

VARIABLES MEASURABLE BY SOCIOLOGICAL RESEARCH

Topic Nonmarket Variable Measurements

Human capital.... Human capital Skills; kinds of ability; credentials;

effects on individual's production
Allocation of time. Time; household Time-money budgets; identification
production and measurement of basic com-
modities; monetary valuation of
time; household production func-
tions
Fertility .......... Quality of children Skills; nongenetic aspects of intelli-
gence; values and behavior pat-
terns of children
Discrimination .... Discrimination Intergroup attitudes measured in
coefficients monetary units; test for additivity
of di
Social interactions. Nonmonetary components Monetary evaluations of characteris-
of social income tics of others and of social bonds;
their dependence on chooser's ac-
tions
Marriage ......... Basic commodities and Monetary valuation of basic com-
household production modities; household production
functions; changes in "caring"
Crime ............ Nonmaterial costs of Measurement of externalities in mo-
crime netary terms; valuation of nor-
mative order; changes in be-
havior tendencies due to punish-
ment

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 Review Essay

Any ethical system that is concerned with the maximization of some quan-
tity must be concerned with trade-offs. Thus for such an ethic the value of
particular states of affairs for individuals must always be assessed in com-
parison with other states of affairs. The basic measurements of value for an
individual then center about what things, in what quantities, are valuable
for him or her relative to other things. One may imagine a multidimensional
surface describing the welfare received or experienced by that individual in
terms of his possession of various goods, services, or other characteristics of
his situation. In Becker's formulation the dimensions of such a surface might
correspond to "basic commodities." With consensual assumptions about
yardsticks for interpersonal comparison, these individual functions may be
aggregated (MacRae 1976, pp. 126-29).
This welfare surface for the individual should not, however, be confused
with the social welfare function that the individual entertains. The welfare
surface for the individual expresses the sources of that individual's welfare, in
terms of the particular ethical system that we may choose as a standard of
measure. The ethical system in terms of which we assess the individual's
welfare is our social welfare function; the individual in question may have
one as well, referring to all members of society and not merely to himself.
Nor does the welfare surface for the individual necessarily correspond to
that individual's preference surface (often referred to as a "utility" surface,
a usage that unfortunately embraces both these meanings). For certain types
of utilitarian ethics the correspondence is close; for the economic ethic of
preference satisfaction, welfare and preference may be identical, and the
term "utility" may then be used in its double meaning; but for other ethics
such as perfectionism, the two may diverge greatly. Even for some types of
utilitarian ethics, the welfare and preference surfaces for an individual differ
in important ways (MacRae 1976, pp. 138-45).
My review of Becker's work has aimed to show its potential benefits for
sociology in valuative as well as positive research. The power and generality
of his theories are a challenge to sociologists to test these theories by their
own procedures, to extend them, or to develop analogous theories of systems
in equilibrium-or even dynamic systems. The directness of application of
microeconomics to policy choice poses the question whether sociology might
be applied similarly within a precise valuative framework.
These advantages and challenges are presented by Becker and by other
economists working along similar lines not merely to sociology but to all the
other social sciences. We cannot be sure which disciplines will take the most
advantage of them. These lines of investigation may continue to be developed
largely within economics, but they will not thereby attain their greatest
potential. One or more other disciplines may reach out to make contact with
them; my review is intended to persuade sociologists to make that effort.
But if this synthesis is too strongly resisted by existing disciplines and their
paradigms, perhaps it can find a place in the emerging applied discipline of
policy analysis (MacRae 1976, chap. 9)-and provide a needed theoretical
base to supplement the analysis of particular policy choices.

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American Journal of Sociology

REFERENCES

Bator, Francis M. 1957. "The Simple Analytics of Welfare Maximization." American

Economic Review 47, no. 1 (March): 22-59.
Becker, Gary S. (1957) 1971a. The Economics of Discrimination. 2d ed. Chicago: University
of Chicago Press.
1971b. Economic Theory. New York: Knopf.
1975. Human Capital. 2d ed. New York: National Bureau of Economic Research
and Columbia University Press.
Coleman, James S. 1957. "Multidimensional Scale Analysis." American Journal of So-
ciology 63, no. 3 (November): 253-63.
Cyert, Richard M., and Charles L. Hedrick. 1972. "Theory of the Firm: Past, Present,
and Future; an Interpretation." Journal of Economic Literature 10, no. 3 (June): 398-
412.
Kuhn, Thomas S. 1970. The Structure of Scientific Revolutions. 2d ed. Chicago: University
of Chicago Press.
MacRae, Duncan, Jr. 1976. The Social Function of Social Science. New Haven, Conn.:
Yale University Press.
Michael, Robert T. 1972. The Effect of Education on Efficiency in Consumption. New York:
National Bureau of Economic Research.
Parsons, Talcott. 1937. The Structure of Social Action. New York: McGraw-Hill.
Samuelson, Paul A. 1970. Economics. New York: McGraw-Hill.
Walras, Leon. 1874. El1ments d'economie politique pure. Lausanne: Rouge.

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