Measuring economic growth, market integration, and the standard of living requires statistics on wages, prices, and income. Before the nineteenth century, the information to measure GDP is quite sparse. Real wages, however, can be computed. This web site provides time series of consumer price indices and wages for leading European cities running from the middle ages to the First World War.
Price histories are an indispensable source of data. In these works, the historian finds an institution like a college or hospital with accounting records extending over hundreds of years. The price and quantity of all the goods bought and sold are used to compute the price paid or received every year. The wages of employees are also abstracted. These data can often be supplemented with the records of prices in organized markets and the regulated prices of basic commodities like bread. Thorold-Roger's A History of Agriculture and Prices in England (1866-92) and Hauauer's Etudes économiques sur l'Alsace ancienne et moderne (1878) were the first comprehensive price histories. Since then, many other cities have been studied. Much work was done in the 1930s under the auspices of the International Price History Commission, and more histories have been written since.
To be useful, the price histories need to be computerized, the local weights and measures must be converted to the same units, and the currencies must be expressed in a common standards. I have done this by converting weights and measures to metric equivalents and by converting currencies to grams of silver–the leading medium of exchange. The results are described in my paper ‘The Great Divergence in European Wages and Prices from the Middle Ages to the First World War'. It is available on the web at www.idealibrary.com.
The paper reports consumer price indices, the nominal wages of building craftsmen and labourers, their real wages, and welfare ratios (annual incomes relative to the consumer price index interpreted as a poverty line as explained in the paper). The time series run from the thirteenth century to 1913. These series are in the following two excel files: craftsmen, labourers.
It would be a great thing if real wage comparisons could be extended from European cities to the whole world. Then we would know which were the leading economies in earlier centuries and when Europe's present lead emerged.
I have undertaken preliminary calculations of real wages in pre-industrial Japan, India, and China and compared them to Europe. You can read the results in ‘Real Wages in Europe and Asia: A First Look at the Long-Term Patterns'.
Also available is my paper 'Agricultural Productivity and Rural Incomes in England and the Yangtze Delta, c. 1620- c. 1820'.
If you have data on wages and prices for a country and want to compare its standard of living to that in Europe, you must perform several calculations:
First, the ratio of the nominal wage in your country relative to the nominal wage in a European country must be computed for a base year. ‘The Great Divergence' gives you lots of European wages to chose from. The wages can first be converted to a common metric–grams of silver, for instance–but that is not necessary. Just make sure that you process prices and wages in the same way.
Second, the ratio of price levels must be computed. Choose a basic of goods and corresponding quantities consumed or shares of expenditure. Use these weights to compute the relative price levels in the Europe and your country.
Third, divided the relative nominal wages by the relative consumer price levels to get the relative real wages in the base year.
Fourth, if you have a real wage index for your country, you can link it to the base year values to extend comparisons to other years.
‘Real Wages in Europe and Asia: A First Look at the Long-Term Patterns' shows detailed examples of these calculations. Good luck and let me know what happens!
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