Household consumption patterns and the consumer price index, England, 1260–1869

Abstract

Existing long-run consumer price indices for England rely on a fixed consumption basket. Here we construct a methodologically improved, chained-Laspeyres price index for ordinary households based on their changing expenditure patterns between 1260 and 1869. Rather than offering a revisionist perspective on long-run costs, it confirms the broad accuracy of existing indices for the pre-industrial period. The dominant dependence of the key items of expenditure on agricultural, particularly arable, prices explains this finding. The industrial period introduced a new dynamic. The shift in household expenditure towards imported groceries and manufactured goods allowed for more substitution in response to relative price and income changes. Adding the current series to those chained-Laspeyres indices available for later periods provides a CPI for ordinary households in England over nearly eight centuries; from 1260 to the present day. K E Y W O R D Sconsumer price index, consumption, household expenditure, living standards, England, long run Estimates of material living standards as well as assertions of high real wages in north-western Europe and their effect on technological innovation and economic growth all depend as much on what happened to the price level as they do on the money wages workers received. 1 Considerable attention has been paid to improving long-run wage series, much less to the underlying rate of 1 Allen, 'Great Divergence'; Clark, 'Long march'; idem, 'Condition'.

Wages, prices and living standards in a growing economy. The case of Boston, Massachusetts

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