Evgeny Evgenievich (Eugen) Slutsky was born on 7 April 1880, in Novoye Selo in Yaroslavskaya province into a teacher’s family.

From early childhood he was very impulsive and inconsistent. He graduated from high school in 1899 in Zhitomir and then studied in the Mathematics Department of the Physics and Mathematics Faculty of the University at Kiev.

Slutsky had numerous abilities: he was talented in mathematics, but also in the arts, especially painting and writing poems. After graduation from the university an academic career was not an option (owing to his reputation as a “red student”). Slutsky therefore started to work as a freelance teacher at his father-in-law’s school.

At the same time his mathematical talent gained new momentum: in 1911-12 he came across mathematical statistics introduced by A.V. Leontovich’s book, Elementary Guidelines to Gauss and Pearson Methods in the Assessment of Errors in Statistics and Biology (Leontovich 1909-11). Slutsky was fascinated by the ideas of K. Pearson and already in 1912 published his own book entitled Theory of Correlation and Elements of Distribution Curves Theory, first in a publication series of Kiev Commercial Institute and later as a separate publication (Slutsky 1912).

The same year he had to go to St Petersburg to the Ministry of Commerce and Industry in order to get permission to continue teaching. On this occasion he met Professor A.A. Tchuprov at the Polytechnical Institute of Peter the Great. Tchuprov came up with the idea of translating into Russian the widely known book by G.U. Yule, An Introduction to the Theory of Statistics, whose second edition was published in London in 1911. Slutsky and N.S. Tchetverikov, a student of Tchuprov, were supposed to translate the book. Although the project could not be realized owing to the outbreak of World War I, the intellectual friendship of the three statisticians lasted.

Because of good reviews of the Theory of Correlation, Slutsky was invited to join the Kiev Commercial Institute from January 1913, where he stayed until 1926. In order to be able to continue his teaching career, he had to take the exam for a Master’s degree in political economy and statistics at Moscow University in 1917. On 14 November 1913, at the meeting of the Economists’ Society, he presented an article devoted to the con­tributions of William Petty. This article was first published in a student journal of the Commercial Institute in 1914 and later as a separate book (Slutsky 1914).

A result of his intensive work on economic theory was his article “On the theory of the balanced consumer budget” which was published in the Italian journal Giornale degli economisti e rivista di statistica (Slutsky, 1915). The article brought him world recognition. The Slutsky equation relates changes in Marshallian demand to changes in Hicksian demand. It demonstrates that demand changes owing to price changes are the result of two effects: the substitution effect as the result of a change in the exchange rate between two goods; and the income effect, which relates to the change of the consumer’s purchasing power consequent upon a change in price.

where h(p, u) is the Hicksian demand and x(p, w) is the Marshallian demand, at price level p, wealth level w, and utility level u. The first term on the right-hand side of the equality sign represents the substitution effect, and the second term represents the income effect. In this article, Slutsky developed some ideas by Francis Ysidro Edgeworth and Vilfredo Pareto about the relation between the utility function, prices, income and consumption. Slutsky’s article was published in Russian for the first time only in 1963 (Slutsky 1963).

Before World War I, Slutsky became interested in psychology and sociology, but still stayed close to mathematics. He taught a variety of subjects - from mathematical statis­tics to economic history and social studies. However, teaching did not bring him satis­faction. After his Master’s degree at Moscow University he left Volodkevich’s school in 1918. The first half of the 1920s was very productive for Slutsky as an economist. In 1923 his work “On the issue of calculation of state income from emission” was published as a mathematical supplement to an article by L.N. Yasnopolsky. In it Slutsky presented a graph of money emission as a curve on a logarithmic scale (Slutsky 1923).

In 1926 Slutsky moved to Moscow to work in the Central Statistical Office. In February 1926 he started to work as a consultant at the Business Cycle Institute of the National Committee of Finance of the USSR, where he studied economic cycles in capi­talistic countries. At the same time he was the head of the Agricultural Section of the Institute of Experimental Statistics and Statistical Methodology of the Central Statistical Office of the USSR. In 1930 Slutsky worked in institutions related to geophysics and meteorology. The subject of his research was the impact of solar activity on crop yields. In the early 1930s he also worked on the problem of times series.

During World War II he was evacuated to Tashkent. After coming back to Moscow he was diagnosed with lung cancer. Nevertheless, he continued to build the tables of incomplete Γ-functions until his last days. He died in Moscow on 10 March 1948.

Irina Eliseeva

See also:

John Richard Hicks (I); Vilfredo Pareto (I); Russian School of mathematical economics (II).