Gorman, William Moore (Terence) (1923–2003), economist, was born 17 June 1923 at Letterkeen, near Enniskillen, Co. Fermanagh, the son of Richard Gorman (d. 1927) and his wife Sarah Crawford (née Moore) (d. 1963). His father was a vet who practised in Lusaka, Northern Rhodesia (latterly Zambia), where Gorman’s early childhood was spent; his African nursemaid, believing his first name to be insufficiently Irish‐sounding, dubbed him Terence, the name by which he became universally known. After his father’s death, he returned with his mother to Ireland where he was raised on his mother’s family estate at Kesh, Co. Fermanagh. Educated at Mount Temple School, Rathgar, Dublin, and Foyle College, Derry, he entered TCD in 1941 where he studied economics and mathematics. He was elected a foundation scholar in mathematics in 1943 before interrupting his studies to serve as a radio mechanic in the Fleet Air Arm of the Royal Navy (1943–6), first as a rating and then as petty officer (1945–6). Resuming his studies in Trinity he graduated in economics (1948) and mathematics (1949). In summer 1948 he wrote an undergraduate thesis that sought to explain the price‐differential in tomatoes sold in Dublin; this served to stimulate his life‐long fascination with the theory of consumer behaviour. While in Trinity he met Dorinda Maud (Din) Scott, daughter of a civil servant, Walter Thomas Scott of Clontarf, Co. Dublin; they married on 29 December 1950.
In January 1949 he was appointed a research associate in economics at the University of Birmingham, where later that year he became assistant lecturer. He was soon promoted lecturer (1951) and then senior lecturer in econometrics and social statistics (1957). During the 1950s Gorman and others helped Birmingham to establish itself as a leading centre for theoretical economic research. In 1962, he moved to Oxford to be professor of economics (1962–7), and afterwards became professor of economics at the London School of Economics. There he oversaw the development of a taught masters programme in econometrics and mathematical economics, one of the first of its kind outside the USA. In 1979 he returned to Oxford as a fellow of Nuffield College, later becoming senior research fellow (1984), before retiring as emeritus fellow in 1990. He also spent several periods as a visiting professor in various American universities and was visiting professor at University College London (1986–96).
Approach to economics One of the most distinguished economists of the twentieth century, Gorman featured on many shortlists for the Nobel prize for economics and influenced the work of several Nobel prizewinners. Unknown outside academia (and even within it his was a niche audience), his application of mathematics to consumer behaviour made him one of the leading formulators of modern consumer theory and influenced both theoretical and applied economics; his insights are in the mainstream of modern economics and marketing. He was one of a small group of economists in the decades immediately after the second world war who emphasised the use of quantative methods in economic reasoning. His lack of wider recognition can be attributed to the dauntingly technical nature of his published work, consisting primarily of general and rigorous mathematical arguments that even algebraically literate economists (and biographical encyclopedic writers) find difficult to grasp.
Yet his work was usually stimulated by everyday observations of – and commonsense insights into – consumer demand, from which he would derive an ambitiously wide‐ranging theory that could be applied to a variety of circumstances. He acknowledged his debt to the TCD economist George Duncan (1902–2006) who had taught him always to expect the result he was attempting to prove. His academic colleagues commented admiringly that his mathematical prowess was driven by a powerful underlying logic, being merely a means of establishing something that he knew intuitively to be true. The main pre‐occupation of his path‐breaking research was the connection between individual consumer preferences and the behaviour of the market, which was itself the product of innumerable individual decisions. In effect he aimed to bridge the gap between theoretical descriptions of macroeconomic phenomena and real world observations of microeconomic decision‐making.
Widely viewed as a pure theorist, he was deeply engaged in overcoming the challenges confronted by applied economists. However, having little interest in applied empirical work, he did not publish on the application of his ideas to data. Invariably, he was drawn away from real‐world applications by a compulsive pursuit of sophisticated abstraction, a tendency which less mathematically inclined economists found admirable but unpalatable; others questioned whether his quest for elegant and all‐encompassing mathematical models was always appropriate for a discipline that could hope to do no more than deal in approximations rather than in certainties. Nevertheless, his influence was most deeply felt in the field of applied economics where the tools and theorems that he developed became widely employed in empirical research.
The ideas His first important contributions to the economic theory of consumer decision‐making was to develop a systematic framework for examining the link between individual behaviour and aggregate outcomes. In 1953 his first published paper established the necessary and sufficient conditions in which a community of utility‐maximising individuals can be said to behave as an individual, thereby enabling conclusions to be drawn on individual behaviour from macroeconomic data. Eight years later another paper on this topic produced the most general mathematical formula for consumer preferences, which permits consistent aggregation from the individual to the community level. This became known as the Gorman polar form and helped to provide a rigorous mathematical basis for the concept of a cost of living index. Later he wrote a seminal paper deriving the necessary and sufficient conditions for an aggregate measure of capital to exist.
His early work on aggregation led him to the duality theory of consumer behaviour, which he regarded as one of the most important theoretical tools in his arsenal and was crucial to his development of the Gorman polar form after 1953. As he did not publish his pioneering explorations of duality theory, credit for its development is ascribed to others, although he appears to have formulated it independently and was one of its most ardent proponents. This theory maintained that as households and firms typically take prices as a given, it is easier to understand their behaviour in terms of functions defined over prices than defined over quantities. The dual approach involved exploring the relations between cost functions and production functions, and enabled him to develop a framework for adult equivalence scales, which dealt with the problem of comparing the income distribution consequences of government policy changes between households of differing composition. He recognized that differences in family composition are better thought of not as altering the effective number of consumers but as altering the effective prices which that family must pay. In characteristically homespun fashion, he summarised by saying: ‘when you have a wife and baby, a penny bun costs threepence’.
While a visiting professor at the University of Iowa in the late 1950s Gorman examined the market price fetched by Iowa eggs and realized that consumers were guided in their choices mainly by considerations of quality, which they determined by considering a relatively small number of factors such as freshness, nutritional value and colour. Proceeding from this he developed a formula allowing economists to make comparisons between the prices of a wide range of similar but not identical goods in terms of a small number of underlying unmeasured characteristics. Known as the characteristics approach it underpins the most widely used asset‐pricing models in modern finance theory.
His development of the characteristics approach reflects his lifelong pre‐occupation with the central conundrum of the economic modelling of consumer behaviour: the need to develop algebraic representations of the complex process of individual decision‐making that are realistic but also simple enough to enable applied economists to manipulate them usefully. This consideration led him to the concept of separability, whereby certain aspects of a mathematical model would be simplified while retaining enough credibility to preserve the integrity of the wider structure. Separability is particularly appropriate for goods that meet widely different needs and during the 1960s he experimented with the idea that consumers simplified their decision‐making by first allocating resources between broad categories such as food, clothing, and housing, and then by buying specific goods or services within those categories. His work on this subject examined the extent to which choices within one of many commodity groups can be made with only limited information about the choices available in the others.
The man Likeably eccentric, utterly absorbed in his intellectual pursuits and notoriously absent minded, the very model of the otherworldly academic, he relied heavily on his wife’s unflagging support and tolerance in order to navigate everyday tasks. As a lecturer he was hindered by his difficulty in relating to those who could not so readily view economics through an algebraic prism; students were at first intimidated by his obvious intellect and complained that they found both the content of his lectures and his strong Fermanagh accent to be utterly incomprehensible. This probably did not bother him unduly and on one occasion he commented that he had benefited from being poorly taught as an undergraduate at TCD because it had obliged him to think for himself. He was at his best in the more informal roles of tutor and mentor, being generously supportive of his students – including weak ones – and junior colleagues. Protégés warmly recalled participating in the Gorman workshop in which a number of his students would present a paper to Gorman and their peers.
A firm proponent of the ideal that scholars should pool their knowledge, he had no time for competitive self‐aggrandising in academic life; this surely reflected not just his fundamentally unassuming nature but also his quiet confidence in his own ability and in the worth of his research. During the 1960s a furious controversy raged between the two Cambridges (of England and of Massachusetts) regarding the aggregation of capital but Gorman’s contributions to the subject loftily disregarded the scholarly affray going on around him and proved all the more lasting for it. Without claiming any personal credit, he gladly facilitated fellow scholars working in his area of expertise. He also had the appealing habit of freely admitting his own mistakes. In his published output, his willingness to outline missteps that he made in the course of formulating his mathematical expressions gives his writing an engaging thinking‐aloud quality and provides a rare insight into the halting process by which intellectual progress occurs. For years many of his unpublished papers circulated among an appreciative but rather select circle of connoisseurs, and it was said that he published relatively little. This was remedied somewhat in 1995 with the publication of the first of two intended volumes of his Collected works, which included many previously unpublished papers.
The obsessive manner in which he devoted himself to whatever task was at hand and his inability to engage in non‐intellectual matters made him unsuited to academic administration. However he did exert himself in pressing for appointments to be made in a transparent and meritocratic fashion and thereby helped to maintain high academic standards in the research institutions of which he was a member.
In private conversation, Gorman preferred to discuss history and politics, and he read widely on the former. He identified with both the nationalist and unionist traditions in Ireland – although he was born into the latter, he believed that his family ancestry lay with the Gaelic Irish. He retained connections with Ireland and late in life would spend his summers in Co. Cork. His interest in Irish history emerges most memorably in his 22‐line article in the Review of Economic Studies entitled ‘Clontarf remembered’ where, in replying to the robust criticisms of a Danish economist, he likened his plight to that of an early Irish scholar‐monk beset by axe‐wielding Vikings. A colleague placed great significance in this wry self‐portrait of Gorman as a round‐tower academic: someone who felt himself to be both operating on a higher plane to those around him while also feeling slightly embattled by the presence of the heathen multitudes unable to grasp the import of his scholarly endeavours.
As his glittering academic career progressed he was awarded a number of honours becoming president of the Econometric Society (1972), chair of the European branch of the Econometric Society (1971–73), fellow of the British Academy (1978), honorary foreign member of both the American Academy of Arts and Sciences (1986) and the American Economic Association (1988), and member of the Academia Europaea (1990), as well as receiving honorary doctorates from Birmingham University (1973), Southampton University (1974) and University College London (1998). In Ireland he received an honorary doctorate from the National University of Ireland (1986) and an honorary fellowship from Trinity College Dublin (1990).
During his final years he suffered from Alzheimer’s disease and was forced to enter a nursing home. He died from a heart attack on 13 January 2003 at the Manor House nursing home at Merton, Oxfordshire, and was survived by his wife; they had no children.