Arnold Zellner, Physicist Turned Economist and Statistician
by Kathy Morrissey
Arnold Zellner was born on January 2, 1927, in Brooklyn, New York, to Ukranian
immigrants Dora Kleiman Zellner and Israel (Sam) Zellner. With the help of
his loving grandmother, Arnold’s parents raised him and his older brother,
Norman, with great appreciation for the American freedoms and opportunities
denied to citizens of their native country.
Arnold attended Harvard University on scholarship, earning a bachelor’s
degree in physics in 1949. Upon completing his tour of duty in the Army, he
used his GI Bill benefits to attend the University of California, Berkley,
where he earned a PhD in economics in 1957. He held appointments in the Department
of Economics at the University of Washington (1955–1960) and the University
of Wisconsin (1961–1966) before accepting an appointment as the H.G.B.
Alexander Professor of Economics and Statistics at the University of Chicago,
Graduate School of Business (1966–1996). Since retiring in 1996 from
the University of Chicago, he has been a frequent lecturer throughout the world
and a visiting professor in the Department of Agricultural and Resource Economics
at the University of California, Berkley.
My aim in interviewing Arnold was to learn more about him as a person: his
childhood, early career, and interests. This is what I found.
Early Life and Career
M: Would you tell me a little bit about your childhood?
Z: I was very lucky during my childhood years. I had very caring parents,
a wonderful grandmother, and a loving brother. My parents came to the United
States in about 1906 from the Ukraine, as immigrants. They both were in business
and gave us a great upbringing.
I was active in almost all the sports—baseball, basketball, football,
golf, tennis. Then too, I liked to read—particularly Mark Twain, Leo
Tolstoy, and the works of other famous authors. And, of course, I tried my
hand at playing musical instruments. I was a violinist in our junior and senior
high school orchestras and played piccolo for a year in the high school band.
M: What was high school like?
Z: We were very lucky in high school. The town I grew up in was Long Branch,
New Jersey, about 50 miles south of New York, right on the Atlantic coast.
Long Branch had one of the best school systems, I would say, in the country.
Long Branch High School was outstanding. We had great courses in English. Ms.
Davis taught us English courses that were on par with college courses I took
later. Mr. Seeley taught physics, and Mr. Tobey taught math. These fine courses—along
with courses in history, biology, chemistry—were first-rate.
I was active in the high school drama club and played on the junior high school
basketball team as a substitute. We were undefeated for three years. Also,
I played on sand-lot football and baseball teams. In high school, I was a substitute
on the baseball team. I really enjoyed sports quite a bit, but had to cut my
sports career short in order to help my parents in their retail grocery business
from about 11th grade on. I did learn a lot about business from this experience.
M: Why did you choose to study physics? Did you have a particular reason for
choosing Harvard?
Z: What attracted me to math and physics was the beauty of the subjects, the
ability to solve problems, and to check answers with data and real-life outcomes.
As regards Harvard, Long Branch High School had a tradition of funneling their
best students to Harvard. I went to Harvard mainly because of that tradition
and because I received a scholarship. As you know, there was a lot of discrimination
against minorities—blacks, Jews, and others. This was just the period
of time when higher education was softening its discriminatory policies.
M: Do you have any fond memories from that time you’d be willing to
share?
Z: One that is very fond is the outcome of the compulsory freshman English
examination. After passing the exam, I was asked why I did so well. Of course,
I mentioned the wonderful English courses I took in high school with Ms. Davis.
M: After Harvard, you were a physicist at Naval Ordinance Test Station in
China Lake, California. Would you tell me a little bit about that job?
Z: After I finished my undergraduate studies at Harvard, I wanted to see a
different part of the country and noticed that there were summer openings at
the Naval Ordinance Test Station at Inyokern, California, right on the Mojave
Desert. I said, “That would be different!” I spent the summer there
doing two projects. One involved working on how to calculate, or determine,
the orientation of a missile in space from photographs taken at spatially separated
telescopic photographic stations. The idea, provided by the head of the unit
to which I was attached, was to take photographs at the same instant in time
from a couple of photographic stations and use them in equipment that I built
to determine the orientation of the missile in space. Next, photographs, taken
later in time, were employed and again used to determine the orientation of
the missile. I was able to determine the orientation of the missile at various
points in time in its flight from photographs taken at different sighting stations.
M: After starting your graduate studies in physics at Berkley, you joined
the Army. What did you do in the Army, and where were you stationed?
Z: Well, I was drafted into the Army and took my basic training in Fort Ord,
California, down the coast between San Francisco and Los Angeles. After basic
training, given my technical background, I was assigned to the Special Professional
Program (SPP) and assigned to Fort Detrick, Maryland—the chemical warfare
center of the United States Army. And of all people, guess who was there? Don
Marquardt, the statistician who was to become a president of the ASA! Then,
even though I had an offer to go to Harvard as an assistant to Professor Oncley
or to stay on at the lab as a civilian, I decided to go back to UC Berkeley
to finish my doctorate in economics.
M: You’ve had a successful career in economics and statistics. Were
you confident at the time that this change from physics was absolutely the
thing to do?
Z: With respect to life, nothing is absolutely certain. We have to deal with
uncertainty, and there statistics comes in very importantly—especially
Bayesian statistics. I think, looking back, that it turned out very well, and
I’ve enjoyed working on the problems I’ve encountered. I think
I really realized my ambitions in making the change at that time. I think if
I had remained in physics, I’d be working on much narrower problems,
rather than the big problems I’ve been working on in economics, statistics,
and econometrics—a very important range of problems, in my opinion.
Family
M: I’d like to ask you how you met your wife, Agnes, and whether she
shares your interest in economics and statistics.
Z: We met when I was a graduate student at Berkeley and got married when I
was in the midst of my graduate studies. She’s been very loving and supportive
over the years, a very wonderful wife. While she has an interest in certain
parts of economics and statistics, her interests are mainly centered on other
areas (e.g., our family (five sons), social problems, art, and literature)
M: You have five sons, and I’m wondering how they feet about growing
up with a well-known professor and researcher as a father. Do any of them share
your interests?
Z: Well, I was never a stuffy old professor! I kept everything very informal,
and we got along just splendidly, I’m happy to say. My wife is just wonderful
with children, and we made a great effort to make sure they grew up well and
developed wholesome attitudes toward the important things in life. We are very
lucky that they all developed well and are enjoying good careers. Our oldest
son, David, is active in the computer area. Our second son, Philip—who
has a master’s in business administration from Chicago—is an economic
consultant in the Washington, DC, area. The third, Samuel, has an engineering
degree from Northwestern and a master’s in business administration from
Chicago and is an industrial engineer and executive with Bell South in Atlanta.
Our fourth son, Daniel—with a master’s degree in drama from UCLA—is
a playwright who has combined drama and computing techniques in several of
his plays. Our fifth son, Michael, majored in economics, with special emphasis
on economic development, and now is the publisher, co-owner, and former editor-in-chief
of Latin Trade, a monthly magazine dealing with economic and business issues
in Latin America. It’s a tribute to our country that our sons, and others,
have had such great opportunities.
Influences
M: Colleagues have described you as persistent and having strong convictions.
Have your persistence and strong convictions ever gotten you into trouble
or resulted in an amusing story you’d be willing to share?
Z: I like to keep things simple. If I’m ever accused of being, as you
say, persistent, it’s a belief in sophisticated simplicity. If it’s
too complicated, it’s probably wrong! Sometimes I do get into arguments
with respect to this issue, and I particularly remember one with Larry Klein
that is rather humorous.
He lectured to a large group assembled by the NSF to appraise the performance
of macro-econometric models at the University of Michigan at Ann Arbor. He
made the following statement at the beginning of his lecture: The world is
complicated, therefore we need complicated models. Thinking I was at a Chicago
workshop, I immediately commented: How do you know? How do you know the world
is complicated? Maybe you don’t understand it, and that’s why it’s
complicated. And even if it is complicated, it doesn’t follow logically
or practically that we need complicated models. Maybe starting simply is a
better strategy. He’s a very good friend, and replied, “Arnold,
let’s agree to disagree and I shall go on.” I don’t think
we’ve ever reconciled that difference.
M: You have received many awards and honors throughout your career. Are there
any that mean the most to you?
Z: There are two. One was being elected president of the American Statistical
Association. It is an organization I’d always admired and delighted in
participating in over the years. It’s an open, constructive organization
in contrast to some other organizations. Everybody is free to do what they
want, and it’s democratically run and achieving its objectives. To be
elected president of that organization was a delight; it made me very happy!
I was so proud. I went to Atlanta in 1991 for the meeting at which I was appointed
president formally. It was a pleasure I never thought I’d experience.
That was really a highlight of my life, there’s no question about it.
The second honor that I cherish is being the first elected president of ISBA,
the International Society for Bayesian Analysis. To have my friends and colleagues
express their support and appreciation for what I did by electing me president
and giving me a Founder’s Award is something I shall cherish always.
M: What have been the major influences on your career? Have there been crucial
events that caused you to rethink your priorities, goals, or research?
Z: No, I think I should be perfectly frank. When I was in high school, I wanted
to be a university professor in physics and play baseball in the summer. I
was not good enough at baseball! However, teaching and research turned out
to be, you might say, my cup of tea. I really enjoy doing both, and to have
the freedom to do research in whatever I want, to travel and do all these things
without restrictions…that’s really a miracle! I often wonder what
I did to deserve all this. It turned out much better than I expected.
M: What do you do when you are not working? Do have a favorite hobby or pastime?
Z: I still enjoy all kinds of sporting activities. It’s a nice, lovely
change from doing all the work at the desk. I, along with many others, have
had a life-long fascination with how the mind and the body interact and how
to make the interaction more productive, say, in lowering my golf score or
in upping the rate at which I get new ideas.
I also read a lot; reading on the philosophy of science interests me quite
a bit. We travel a lot. I have a great love of the beauty of nature. Sometimes,
for example, in view of a beautiful landscape or seascape, I feel at one with
nature—a wonderful experience that I enjoy with many others.
And, there are different art institutes in Chicago. My wife is a volunteer
at the Smart Art Museum, our university art museum, and we go to art exhibits
there and at the Art Institute downtown. We also go to plays at various theatres.
There’s so much going on in Chicago, there’s never a dull moment.
M: Do you enjoy traveling?
Z: Oh yes. My wife particularly enjoys traveling, so we travel at the drop
of a hat. One of the best trips we ever had was in 1978. I was invited to give
a talk in Japan. It dawned on me that it was our 25th wedding anniversary,
thus why not take a trip around the world? We went from Chicago to Los Angeles
to Hawaii (celebrated our 25th anniversary on the beach there), and then went
on to Japan, Hong Kong, Taiwan, back to Hong Kong, India, Tehran, Israel, Turkey,
Germany, England, and back to Chicago. Forty days! It was a wonderful trip,
the best we ever had.
Final Thoughts
M: There has been extensive coverage in the media about the loss of American
jobs—workers laid off in America and the jobs sent overseas to countries
with lower wages. Some people advocate reform in our educational system—particularly
primary and secondary education—and shifting focus from technical subjects
to language skills in order to prepare America for this shift to globalization.
You were a beneficiary of the GI Bill and have taught foreign students to
try and improve their economies. Do you agree the American educational system
needs to be overhauled, and is a focus on language the right emphasis?
Z: The issues of educational reform and globalization are indeed very important.
With respect to education, you mentioned how successful the GI bill was after
WWII. One important reason that it was successful was that it gave individuals
the freedom to finance their educations at institutions of their own choice.
No one told GIs which university or college to attend or what educational specialty
to pick. The choices were left for individuals to make with guidance from parents,
advisors, etc. Also, universities and colleges had to compete strenuously to
attract students to their programs. And since the enrollees were spending their
own GI funds, they appeared to be highly motivated to make good educational
investments and work hard to make them successful. In my opinion, this GI bill
experience is a good guide for future educational policymaking at all levels.
Getting more competition in our educational system, broader choices for students,
better management policies, and competitive educational pricing systems would
do much to improve our educational system.
Technical Contributions
3SLS - Three Stage Least Squares estimation of structural coefficients (joint
with H. Theil)
BA - Bayesian Analysis (text, review articles, speeches)
BIP - Bayesian Information Processing (information theoretic derivations of
Bayes’ theorem and other learning models that are 100% efficient)
BLF - Balanced Loss Functions
BMOM - Bayesian Method of Moments to do inverse inference without a prior and
a likelihood function
BPA - Bayesian Portfolio Analysis (joint with V. K. Chetty)
DRM - Dynamic Resource Model (joint with J. A. Crutchfield)
g-priors - Great priors for multivariate analyses
GPF - Generalized Production Function (joint with N. Revamkar)
MDIP - Maximal Data Information Priors
MELO - Minimum Expected Loss estimation of structural coefficients and functions
of parameters (e.g., reciprocals and ratios)
MMM - Marshallian Macroeconomic Model (disaggregated model of national economy)
SEMTSA - Structural Econometric Modeling, a time series approach for building
and checking dynamic statistical and econometric models (joint with F. C. Palm)
SUR - Seemingly Unrelated Regression model and inference techniques
Honorary Degrees
1986: Universidad Autonoma de Madrid, Spain
1991: Universidade Técnia de Lisboa, Lisbon, Portugal
1998: University of Kiel, Kiel, Germany
Professional Memberships
Econometric Society (Fellow and former member of council)
American Economic Association (Distinguished Fellow, 2002)
American Statistical Association (Fellow, president, Section
chair, Board member)
International Society for Bayesian Analysis (founder and acting president,
1993; president, 1994–1995)
International Institute of Forecasters (Honorary Fellow, 2002)
American Association for the Advancement of Science (Fellow)
International Statistical Institute
American Academy of Arts and Sciences (Fellow)
Institute of Mathematical Statistics
Awards and Honors
1959: National Science Foundation Fellowship to do research at the Cowles
Foundation for Research in Economics, Yale University
1960–1961: Visiting Fulbright Professor, Netherlands School of Economics
and Econometric Institute, Rotterdam, on leave from University of Wisconsin
1964–2001: Continuing NSF grants for research on econometric and statistical
methods and applications
1980–1981: Visiting Fellowship, NBER and Hoover Institution, Stanford
University
1981–1982: John R. Commons Award; named “Outstanding Statistician
of the Year” by ASA Chicago Chapter
1982–1983: U.S. Bureau of Census Certificate of Appreciation for
chairing and service to AEA Census Advisory Committee
1983: McKinsey Award for Excellence in Teaching
1984: Distinguished Service Professor, University of Chicago
1986: ASA Award for founding and editing the Journal of Business and Economic
Statistics
1993: Establishment of the Zellner Thesis Award in Business and Economic Statistics
by the Business and Economics Statistics Section of the American Statistical
Association
1994: Erskine Fellowship to visit Departments of Economics and Statistics,
University of Canterbury, Christchurch, New Zealand
1996: D.A. Berry, K.M. Chaloner, and J.K. Geweke (eds.) Bayesian Analysis
in Statistics and Econometrics: Essays in Honor of Arnold Zellner, John Wiley & Co.
1998: Founders Award, International Society for Bayesian Analysis; CDC Investment
Management Corporation Research Award to University of Chicago, Graduate School
of Business, in Honor of Arnold Zellner; Honorary Guest of South African Statistical
Association on visit to South Africa to present lectures
1999: Sanford Grossman Graduate School of Business PhD Fellowship Award in
Honor of Arnold Zellner
2001: Establishment of Journal of Econometrics Arnold Zellner Award for Outstanding
Paper in Theoretical Econometrics; Designated first Sir Richard Stone Lecturer
by the National Institute for Economic and Social Research and the Bank of
England; Established Professor B. Peter Pashigian Lecture Fund and Lecture
Series
2003: A Conference in Honor of Arnold Zellner: Recent Developments in the
Theory, Method, and Applications of Information and Entropy Econometrics, American
University, Washington, DC
