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Professor emeritus David Durand dies at 83

Dr. David Durand, a professor emeritus of management who was an early adherent of applying statistical methods-especially sampling-to problems in corporate finance and other fields, died February 26 at the MIT Infirmary. Dr. Durand, who lived in Lexington, was 83.

His family said the cause of death was aplastic anemia.

Raised in Ithaca, NY, Dr. Durand received the BA degree from Cornell University in 1934, and both a master's degree (1938) and PhD (1941) from Columbia University. He was a lieutenant in the US Naval Reserve during World War II, serving in the Hawaiian Islands and on Guam.

Before coming to MIT in 1953, he was associated with the National Bureau of Economic Research, then in Riverdale, NY, and the Institute for Advanced Study at Princeton University. He also did consulting work for the Twentieth Century Fund and taught part-time at Columbia.

It was at the National Bureau of Economic Research, said MIT economist Dr. Paul A. Samuelson, an Institute professor and Nobel laureate, that Dr. Durand "pioneered the empirical study of how long-term bonds usually require a higher yield than short. Everyone understands that today, but he was the first to document it."

Dr. Durand's first appointment at MIT was as a research associate at the Sloan School of Management. He became an associate professor in 1955 and professor in 1958. He retired in 1973.

In addition to the application of statistical methods to financial problems, his fields of specialization included term structure of interest rates and statistics.

His research in finance included a sampling analysis of default experience for consumer installment loans, farm mortgage lending experience and factors affecting bank stock prices.

His work with statistical methodology and techniques involved the early use of punch-card equipment for general statistical tabulation as well as for mathematical computation.

He was the author of a textbook, Stable Chaos, as well as many articles for professional journals. He was an associate editor of Financial Management for a number of years.

Some of Dr. Durand's strongly held views stirred lively debate with other members of the management faculty.

One of his former doctoral students, Don Lewin of Lewin Associates of York, PA, a consulting firm, said that Dr. Durand "used his keen intellect and statistical knowledge and skills to develop many ideas" and to question whether statistical models matched reality. "Frequently, this did not endear him to those enamored of a model. Indeed, his doubting approach caused him to be often in the center of a controversy."

In one such case involving the cost of capital, Dr. Durand wrote that two Sloan colleagues who disagreed with him "have cut out for themselves the extremely difficult, if not impossible, task of being pure and practical at the same time. Starting with a perfect market in a perfect world, they have taken a few steps in the direction of realism; but they have not made significant progress."

Dr. Durand also insisted, Dr. Lewin said, that the model builder rely heavily on his or her own judgment. In Stable Chaos, Dr. Durand wrote, "Systematic procedures and objective tests serve to strengthen the analyst's judgment, not to replace it; they enable him to learn more quickly and more effectively from his own experience, and to sharpen his critical faculties."

Dr. Durand also championed good writing and enlivened some of his own journal articles with intriguing figures of speech. In one, he wrote: "To suppose that any imaginative analyst or responsible financial manager, interested in a comprehensive view, would be content to base an important appraisal and the subsequent investment decision on just one of the many useful numbers available is on a par with supposing that a hungry gourmet at a smorgasbord would be content to make a whole meal of pickled herring."

Another former student, Dr. Paul D. Berger, professor and department chair in Quantitative Methods and Marketing at the Boston University School of Management, recalled Dr. Durand as "a special teacher and mentor to many students. He had a `jolly' manner about himself that set students at ease and allowed them to enjoy the material he imparted to them. He cared about people and was dedicated to academic integrity and excellence."

Dr. Durand was a member of the American Economic Association, the Finance Association, the American Society for Quality Control, the American Statistical Association, the Econometric Society, the Biometric Society, the Institute of Mathematical Statistics and the International Association for Statistics in Physical Science.

He leaves his wife, Edith (Elbogen) Durand of Lexington, and a daughter, Marie Durand of Princeton, NJ.

There was no funeral service.

A memorial service will be held in the MIT Chapel on Saturday, April 13, at 1pm. Contributions may be made to Deep Springs College in Dyer, NV 89010.

A version of this article appeared in MIT Tech Talk on March 6, 1996.

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