Working Papers

Authors: Hans-Joachim Voth, Dan H. Andersen

Sep 1997

The paper tests the hypothesis that the consistent neutrality of the Danish Monarchy during the great wars of the eighteenth century may have permanently increased the kingdom’s shipping in the Mediterranean. It does so by using data derived from Algerian Passport Registers for the years 1750-1807. Modern time-series techniques are applied to analyse the relative importance of neutrality and favourable factor endowments. We show that the data lends qualified support to both hypotheses, with two thirds of the rise in Danish shipping attributable to neutrality and the remainder, by implication, to favourable factor endowments.

Reference: 018

Individual View

Authors: Ilana Krausman Ben-Amos

Jun 1997

The English family in the early modern period is viewed in the perspective of reciprocity: an exchange of goods that involves giving and obtaining something in return. Reciprocal interactions between parents and children extended throughout the life course and were not confined to infancy or early childhood. The exchange could be delayed, and its timing and duration varied between social groups and across time. It was unequal: the parental investment was large, and the returns were uncertain and less extensive. The exchanges involved a wide range of material and emotional goods: support, affection, prestige, reputation. Reciprocity was not simply granted, but rather it was negotiated and induced with gifts and in other less tangible ways.

Reference: 017

Individual View

Authors: Ed Butchart

May 1997

Britain already had a serious unemployment problem in the 1920s, but the situation worsened markedly after 1929. We investigate the cause of the higher rates of unemployment experienced throughout the 1930s. The most obvious explanation, that aggregate demand was weaker in the aftermath of the Great Depression, does not stand up to close scrutiny. An alternative explanation is that the emergence of long-term unemployment generated hysteresis effects which enervated the market-clearing mechanism. Although we find that the duration composition of unemployment statistically significantly influenced wage determination we note that real wage growth between 1932-39 was modest. It was not the case that the fruits of economic recovery fed through to wages at the expense of jobs. Instead, we highlight important movements in the labour participation rate over the course of the interwar period. The participation rate declined sharply in the early 1920s, but subsequently recovered. The non-employment rate - the fraction of those of working age who are not in work - consequently paints a different picture of the interwar period than the unemployment rate. In particular, the 1930s do not emerge as having had a more serious problem of joblessness than the 1920s. Hence we tentatively conclude that unemployment was higher during the 1930s largely because the unemployment rate was becoming a more accurate measure of joblessness.

Reference: 016

Individual View

Authors: Tom Nicholas

Apr 1997

This paper compares the value of landed and non-landed wealth held by a group of nineteenth century British businessmen. Landed wealth is estimated from the data in John Batemans Great Landowners of Britain and Ireland. Non-landed wealth is documented in probate records. Quantitative evidence shows that businessmen who owned land in the late nineteenth century did not retain a large proportion of their wealth in landed assets. In that sense they were rich because of the personal wealth and not because they were landowners.

Reference: 015

Individual View

Authors: Cristiano Andrea Ristuccia

Mar 1997

This article assesses the hypothesis that in 1935 - 1936 the implementation of sanctions on the export of coal and oil products to Italy by the League of Nations would have forced Italy to abandon her imperialistic war against Ethiopia. In particular, the article focuses on the claim that Britain and France, the League’s leaders, could have halted the Italian invasion of Ethiopia by means of coal and oil sanctions, and without the help of the United States, or recourse to stronger means such as a military blockade. An analysis of the data on coal consumption in the industrial census of 1937 - 1938 shows that the Italian industry would have survived a League embargo on coal, provided that Germany continued her supply to Italy. The counterfactual proves that the effect of an oil embargo was entirely dependent on the attitude of the United States towards the Leagues action. Given that this attitude was by no means clear, a solitary attempt at such an embargo by the League would have failed.

Reference: 014

Individual View

Authors: Norbet Paddags

Feb 1997

The importance of fiscal policy for the inflationary process in Germany in the early 1920s has long been recognised, and at the same time the room for reform has been viewed as very limited. This paper will address this question anew by away of counterfactual analysis. Taking the railways - which contributed significantly to the Reich budget deficit - as an example, various areas of possible reform will be discussed on the basis of contemporary sources, including parliamentary debates. It will be argued that although the traditional opinion about the limits of political reform are confirmed, the economic room for manoeuvre was significantly greater than is often assumed.

Reference: 013

Individual View

Authors: David M. Engstrom

Feb 1997

Ethnic residential segregation is usually investigated using a constrained-choice approach. This study explains the variation in post-war Afro-Caribbean segregation in fifteen British cities by means of historical patterns of economic opportunity. Its dependent variable is newly available census data on residential segregation. It finds that the observed variation in segregation levels cannot be explained in terms of council housing policies or the passage of civil rights legislation from the mid-1960s, but rather by the interaction of New Commonwealth immigration and local labour and housing market conditions during the critical period 1951-1966.

Reference: 012

Individual View

Authors: Avner Offer

Dec 1996

A pronounced cycle of car sales in the 1950s is explained in terms of styling competition and consumer preferences. An oligopolistic industry concentrated on non-price competition, and responded to perceived consumer demand for styling and status, with an accelerated product cycle. Demand was shifting from higher price-and-status models, to the feature-loaded high end of low-price models. This suggests a consumer preference for sensual gratification rather than status. But feature competition was eventually constrained by the physical limitations of car size and power, which created a competitive impasse. Upwards feature drift also opened up a gap at the bottom of market. This gap was invaded by imports. Consumer feature fatigue was expressed in buyers strike in 1958, but Detroit responded nimbly with the new compacts in 1959. There is also evidence that rapid depreciation of new cars, explained by Akerlof in terms of a market for lemons is also found in used cars sold by dealers, and is likely to represent the value of dealer distribution and warranty services.

Reference: 011

Individual View

Authors: Wayne Graham

Aug 1996

The early history of the Transvaal gold mines for long has been linked with imperialism, the Jameson Raid and the Boer War. The gold mine owners actually had no financial interest in war with the Boers since their money was made primarily by stock market manipulation, rather than in efficiently utilising the underlying assets. South African gold mining shares were consistently overvalued relative to their true earning power, both before and after the Jameson Raid. Only the outbreak of the war caused them to slump badly.

Reference: 010

Individual View

Authors: Charles Feinstein

Jul 1996

This paper presents new estimates of nominal earnings, the cost of living earnings for manual workers in Great Britain over the period 1770 to 1870. The estimates are adjusted to allow for unemployment and for the inclusion of agricultural workers in Ireland. The series are then analyzed to establish their implications for the debates about the impact of the industrial revolution on the standard of living; and about the pace of economic growth during this period. The main findings are that the improvement in the material standard of living of the British working class was negligible before 1815 and very modest until after 1861; and that the income-based estimates are consistent with recent evidence from other sources showing a relatively slow rate of growth during the industrial revolution.

Reference: 009

Authors: Hans-Joachim Voth

Jun 1996

This paper analyses why hours of work increased in London between 1750 and 1800. On the basis of a new technique, changes in labour input are described. The main part of the paper uses the data gathered from witnesses accounts to evaluate a number of competing hypotheses. The main part of the large rise in annual working hours, it is argued, can be attributed to the increased availability of consumer durables.

Reference: 008

Authors: James Foreman Peck

May 1996

As the nineteenth century ended, three principal types of engine competed to power the early motor car. Had some minor condition been different around the beginning of the twentieth century, perhaps therefore todays road vehicles would not be powered overwhelmingly by internal combustion engines. That at least is an implication of the lock-in hypothesis. However the choice of product technology depended not on chance but at first on differential relative endowments of natural resources and capital. Abundant oil deposits and water encouraged the American development of lower first cost steam engines, which used more fuel and less capital. Electricity also was cheaper in the United States than in Europe, outside Germany. Since European endowments were not as auspicious for steamers or electrics at the turn of the century, European entrepreneurs focussed on the internal combustion engine. Judged by the rapid development 1895-1900, they chose the most progressive technological trajectory. By 1904, US motor firms were adopting European product technology and abandoning steam. By the end of the First World War they had also given up electricity.

Reference: 007

Authors: Hans-Joachim Voth

Apr 1996

Little is known about the length of the working year in pre-industrial times. This paper develops a new method for analysing patterns of time-use in the past. Witnesses accounts in court records, it will be argued, reflect the actual behaviour of a group that is representative of the population at large. This new technique is applied to London during the middle of the eighteenth century. Results are compared with evidence from other eighteenth-century sources. These findings have important implications for our understanding of the Industrial Revolution. Our estimate of the number of working days helps to resolve some apparent contradictions between wage and income measures.

Reference: 006

Authors: Paul A. David

Mar 1996

Authors: Philip Grover

Feb 1996

It is commonly accepted that the decline of the Wests woollen industry was in large part due to the greater employment of steam power by the Yorkshire industry. Using the account books of the Stroudwater Canal Company, the article examines the role of the Stroudwater Canal in bringing coal to the mechanising woollen industry in the Stroudwater region of the Gloucestershire industry. It is shown that distance was not the main factor in the movement of coal, but that the toll levels were more important. The article shows that the toll levels significantly affected the amount of steam power employed in the Gloucestershire woollen industry, and that the Stroudwater Canal Company therefore played a significant role in the industrys decline during the early nineteenth century.

Reference: 004

Individual View

Authors: Avner Offer

Jan 1996

The Great Transformation’ from customary exchange to impersonal markets has not been completed. Reciprocal exchange pervades modern societies. It takes the form of ‘gifts’ which are reciprocated without certainty. It is driven by the pursuit of ‘regard’: the approbation of others. The idea is found in Adam Smith. Money is avoided in regard exchanges, because it is impersonal. Instead, the regard signal is embodied in goods, services or time (attention). The personalisation of gifts authenticates the signal. Large-scale reciprocal exchange persists in family formation and in inter-generational transfers. It features in labour markets, in agriculture, the professions, in marketing, entrepreneurship, and also in corruption and crime. Reciprocal exchange is constrained by time and psychic energy, but is likely to persist as a preferred source of regard.

Reference: 003

Individual View

Constructing an agricultural output series requires a rational economic basis on which to convert one crop into another, and a conversion method using only the information which we have at our disposal. The traditional method fails on both counts. We develop two alternative methods. The first is extremely parsimonious but imprecise; the second is less parsimonious but allows us to isolate the effect of different crop rotations on wheat yields. We compare the three methods using the farm dataset compiled by Arthur Young on his tours of England and Wales during the Agricultural Revolution and we show that new fallow crops substantially increased the wheat yield.

Reference: 002

Individual View

Authors: Hans-Joachim Voth, Timothy Leunig

Nov 1995

In this paper, we re-examine the effect of smallpox on the height attained by those who suffered from this disease. To this end, we analyse a dataset assembled by Floud, Wachter and Gregory on the height of recruits into the Marine Society, 1770-1873. Using both time series and cross-sectional analysis, we show that smallpox was indeed an important determinant of height: those who had suffered from smallpox were significantly shorter. This suggests that the increase in heights documented by Floud et al. may be explained not just by increased nutritional intake, but also by the eradication of smallpox.

JEL Codes: N33

Reference: 001

Individual View

Authors: Valerie Lechene, Martin Browning, University of Copenhagen

Jul 2018

Several models of intra-household decision making have been suggested in the literature. One important dichotomy is between non-cooperative and cooperative models (including specific models of bargaining). The other important distinction is between models that allow for caring and those that do not. We present a framework that includes all suggested models and variants as special cases. We derive the theoretical predictions of these models for the relationship between expenditures on goods and the intra-household distribution of income. We estimate and test between these relationships using Canadian household expenditure data. We conclude that there is evidence that both husbands and wives care for each other in the sense that with an unequal distribution of incomes the high income partner behaves as a `Becker dictator` and there is local income pooling. We further find that for about half of the households in our sample (those with mor

Authors: Tim Jenkinson, Leonie Bell, Department of Economics, University of Oxford.

Jul 2018

This paper examines the impact of a major change in dividend taxation introduced in the UK in July 1997. The reform was structured in such a way that the immediate impact fell almost entirely on the largest investor class in the UK, namely pension funds. We analyse the behaviour of share prices around the ex-dividend day both before and after the reform to test clientele effects and the impact of taxation on the valuation of companies. We find strong clientele effects in the UK, which are consistent with the distortions introduced by the tax system (before the reform dividend income was tax-advantaged in the UK). We also find significant changes in the valuation of dividend income after the reform, in particular for high-yielding companies. These results provide strong support for the hypothesis that taxation affects the valuation of companies, and that pension funds were the effective marginal investors for high-yielding companies.

Individual View

Authors: Tony Syme

Jul 2018

Unemployment in the 1930s was low in France by international standards, nevertheless there was a virulent drive to expel immigrant workers as a means of limiting domestic unemployment. This involved not only the repatriation of the foreign chômeur, but also legislation to displace the foreign worker from his workplace. This paper extends the current debate over the effectiveness of this strategy with the use of two archival datasets. The inability of the State to reach its immigrant employment targets is confirmed, but it is suggested that it was not that unemployed Frenchmen were not willing to take the unattractive jobs that immigrants held, but that employers were unwilling to substitute their foreign workers with their French unemployed equivalents that undermined this repatriation drive. One implication is that the repatriation of foreign workers that did take place compromised the economic recovery that would begin in 1936.

Authors: David P. Myatt, Chris Wallace

Jul 2018

Collective action problems arise in a variety of situations. The economic theory of public good provision raises a number of important questions. Who contributes to the public good, and who free rides? How might a social planner exploit the interdependence of decision-making to encourage contributions? Under what conditions will such actions result in public good provision? Using a simple game theoretic framework and recent results from the study of equilibrium selection, this paper attempts to answer some of these questions. Under reasonable assumptions of asymmetry and less than complete information, the more efficient agent will contribute. Contributions can be elicited by `integrating` the production process when agents are sufficiently emph{optimistic} about the success of the project. When this is not the case, the social planner may be better off `separating` the project so that individual contributions are independent of each other.

Individual View

Authors: Florian Ploeckl

Jul 2018

Urbanization has been extensively used as a proxy for economic activity.  The urban status of settlements is usually determined by an ad hoc population size household.  This paper proposes a new threshold, taking into account the effect of local agricultural endowments.  The new population threshold is a population size, such that for smaller settlements these endowments influence their size, while for larger they do not.  This results in an endogeneous, data based threshold.  The idea is practically shown for Saxony in the 19th century.  The relevance of a different classification is demonstrated in four particular examples, the development of urbanization over time, Gibrat's law, the impact of geography on town locations and the spatial relationship between towns and villages.  The resulst demonstrate that the underlying classification scheme matters for the conclusions drawn from urban data.

Individual View

Authors: Mark Armstrong,John Vickers

Jul 2018

We present a tractable class of multiproduct monopoly models that involve a generalized form of homothetic preferences. This class includes CES, linear and logit demand. Within the class, profit-maximizing quantities are proportional to efficient quantities. We discuss cost-passthrough, including cases where optimal prices do not depend on other products’costs. We show how the analysis can be extended to Cournot oligopoly. Finally, we discuss optimal monopoly regulation when the firm has private information about its vector of marginal costs, and show that if the probability distribution over costs satisfies an independence property, then optimal regulation leaves relative price decisions to the firm.

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