Background

Kelvin John Lancaster was born on December 10, 1924, in Sydney, Australia.

Education

Lancaster received much of his training in Canada. In 1940, he studied at Sydney Boys High School. After the war, he continued his studies, which were very wide-ranging in keeping with his insatiable intellectual curiosity.

At Sydney University, he studied geology and mathematics as well as English literature. He felt that “analysis” would serve to untangle the intricacies of literature just as well as the structures of mathematics. Besides a degree in mathematics, he received bachelor’s and master’s degrees in English Literature.

Career

John Lancaster after receiving a master’s degrees in English Literature was offered a position teaching English Literature at the University of Sydney. He decided instead to join a research organization, Research Services of Australia, where he worked as an associate (later director) in statistics and economics. There was a need to develop economic indices for a government project, and he developed an index that is still in use in Australia. The nuts-and-bolts work that he did as a researcher-led him to become intensely interested in economic theory, which he proceeded to study on his own.

John was subsequently appointed Assistant Lecturer at the London School of Economics. To counter his youth and youthful appearance he took up the pipe. His concern about making an impression was unwarranted, however, since he immediately gained a reputation for brilliance. When Lord Robbins, in his legendary seminar, called for an analysis of a particularly difficult paper Kelvin volunteered to tackle it; he found a flaw in the argument, developed the solution, and presented the results. At the time he was entirely self-taught in economics.

After serving as Lecturer and then Reader at the London School of Economics, he moved to the United States in 1961, first to Johns Hopkins and in 1966 to Columbia where he remained for the rest of his career. He was twice Chairman of the Economics Department. Among the many graduate and undergraduate courses that he taught was a very popular seminar on Economics and Philosophy jointly with the philosopher Sidney Morgenbesser.

Achievements

• Lancaster is known as an economist who twice helped turn economic theory on its head. He helped develop the theory of “second best,” which suggested that free trade was not necessarily the best option for consumers when there were market flaws in some part of the economy. Economists need to look at all facets of a trade situation, he said, and not just assume that free trade would result in rock-bottom prices when there could be factors in the market that could artificially inflate prices.
  
  His other groundbreaking theory was that economists should not simply look at the demand for a product overall, but also should study how consumers are interested in some specific characteristic of an item and how that would affect their purchase choices. His innovation also laid the analytical foundation for the “new” trade theory of imperfect competition that created waves in the profession in the 1980s.
  
  Lancaster wrote several books on economics, including Introduction to Modern Microeconomics, Consumer Demand: A New Approach, Variety, Equity and Efficiency, and Trade, Markets, and Welfare.
  
  Several honors came his way, among them election to Fellowship in the Econometric Society and in the American Academy of Arts and Sciences, and election as a Distinguished Fellow of the American Economic Association. He was also listed among 100 entries in a 1985 volume on Great Economists since Keynes.
  
  John was widely regarded as a potential recipient of the Nobel Prize, for the notable impact that had been made by his contributions to the theory of second best and the integration of variety into economic theory. He joins the list of extraordinary economists such as Joan Robinson, Roy Harrod, and Mancur Olson whom death deprived of this singular honor.
  
  

Works

More photos

• book

  • Trade, Markets and Welfare

    (Trade, Markets and Welfare brings together a selection of...)

    1996
  • Mathematical Economics

    (Graduate-level text provides complete and rigorous exposi...)

    2012
  • Modern Consumer Theory

    (Professor Lancaster has made a major contribution to cons...)

    1990
  • Introduction to Modern Microeconomics 1967
  • Modern Economics: Principles and Policy 1973
  • Variety, Equity and Efficiency: Product Variety in an Industrial Society 1979
  • Consumer Demand 1971

Views

Kelvin's main contributions to economics would undoubtedly be described as theoretical, but I would like to modify that rather loose term somewhat. I regard myself as a modeler, one trying to model reality as accurately as possible but yet retain a general form. The most widely cited of my papers (No.

3 above) was an attempt to expand the modeling of the consumer’s decision process in order to account for the ability of consumers to handle decision processes involving new products. The conventional model, taken at face value, provided no clue as to what a consumer would do when confronted by a new product, no matter how much information was available about its properties and capabilities. Thus I see my contribution as adding to the realism.

One of the predictions of this model was that anyone consumer would purchase only a small number of the many varieties of available goods and that observed market demand could be described adequately only by taking account of the variety and heterogeneity of consumer preferences. A natural development from this has been my more recent work on the market structures and welfare problems associated with product variety and with preference heterogeneity, as in No. 5 above and Variety, Equity and Efficiency, work which has been extended into the international trade area and is continuing.

Although the above is the most consistent single theme, I have worked on a wide variety of conventional problems and some less conventional, including qualitative methods in economics and differential game aspects of growth and distribution. My predilection has been to search out neglected weak points in our picture of how the economy works, rather than to join the mass attack on problems catching current attention.

Membership

• Econometric Society

• American Academy of Arts and Sciences

• New York State Economic Association , United States

  1974 - 1975

Personality

As a young man, Lancaster was a brilliant student as well as an athlete and an enthusiastic competitor in the lifeguard competitions at Sydney’s Bondi Beach.

Kelvin and Deborah traveled together all over the world; he was especially interested in Indian art and civilization. They often traveled to Israel to see family members and a multitude of friends. He spent a Sabbatical year at the Hebrew University, and he thought of Israel as a virtual second home.

He was a loving and devoted husband, father, grandfather, teacher, and friend, whose wit and good humor always cheered you, and whose insights and compassion always helped you. While admired by all for the power of his intellect, Kelvin Lancaster was loved by colleagues, friends, and students for the gentleness and kindness of his character.

Quotes from others about the person

• “There is no virtue that Kelvin did not have.” - Sidney Morgenbesser

Interests

• athletics, llifeguard competitions, photograph, model-building

Connections

Kelvin's first marriage was to Lorraine Cross. In 1963, he married Deborah Grunfeld, a lawyer and the widow of the economist Yehuda Grunfeld. Their marriage was a happy one, filled with the exchange of ideas as well as devotion to children and grandchildren. His children, Clifton Lancaster, a statistician, and Gilead Lancaster, a cardiologist, both live in Connecticut. He was a doting grandparent, and loved to be with his grandchildren Ian, Neal, Peter, Meredith and Chloe, who adored him and looked up to him.

Father:

John Lancaster

Mother:

Margaret Lancaster

ex-wife:

Lorraine Cross

Wife:

Deborah Grunfeld

Son:

Clifton Lancaster

Son:

Gilead Lancaster

Grandson:

Ian Lancaster

Grandson:

Neal Lancaster

Grandson:

Peter Lancaster

granddaughter :

Meredith Lancaster

granddaughter :

Chloe Lancaster

Lecturer:

Lionel Charles Robbins

Collegue :

Richard George Lipsey

Born on August 28, 1928.

Richard George Lipsey is a Canadian academic and economist.

Collegue :

Sidney Morgenbesser

September 22, 1921 – August 1, 2004

Sidney Morgenbesser was a philosopher and professor at Columbia University.

References

• Who's Who in America
  1999