A history of prices in Canada, 1840–1871: a new wholesale price index

Abstract

We present a new monthly wholesale

A price index for Canada, 1688 to 1850

“…For the era of British rule (post-1760), indexes provide a wider coverage of goods (Ouellet et al 1982;Paquet andWallot 1998, 2007;Horovitz 1967;Paterson and Shearer 2003). The best series-which provides a weighted array of prices for agricultural and non-agricultural goods-is the monthly wholesale price index of Paterson and Shearer (2003), which begins only in 1840. 6 Paquet and Wallot (1967 provide non-weighted indexes of nonagricultural and agricultural prices covering 1760 to 1860.…”

“…But they provide an array of agricultural goods only, with long gaps for many. With the exception of the post-1840s indexes (Horovitz 1967, Paterson andShearer 2003), no researcher created a weighted basket. The general tendency has been to rely on unweighted baskets: in a price series with 20 goods (mostly agricultural goods), for example, each item would account for 5% of the total basket.…”

“…The main remaining difficulty with constructing a price index for Canada before 1850 is the absence of consumption-expenditure measurements, a recurring issue for Canadian historians and economists. Paterson and Shearer (2003), in their monthly wholesale price index, reported that this was a "perplexing issue" resolved "with reluctance" (p. 227) by using weights derived from the famous American price index produced by Warren and Pearson (1933) and adapted by Hanes (1998). However, this difficulty should not be overemphasized as it can be circumvented.…”

“…What data do exist come from a wide array of heterogeneous sources that cannot be reliably mixed and that tend to cover few goods, largely agricultural, over short periods (Hamelin 1960;Horovitz 1967;Richard 1973;Ouellet et al 1982;Rousseau 1983;Desloges 1991;Dechêne 1994;Paquet andWallot 1998, 2007). Moreover, with the exception of one post-1840s index (Paterson and Shearer 2003), no researcher has attempted to create weighted baskets. This state of affairs limits researchers' ability to analyze macroeconomic developments in Canada during the period.…”

“…Both operated schools in Quebec City and owned numerous farm and non-farm estates across Quebec, for which they kept richly detailed account books. My index uses the prices from these books and the expenditure weights from Fyson (1992) and Paterson and Shearer (2003). I assume that the price data gleaned from Quebec represents the rest of Canada.…”