(Coghlan 1918, vol. 1, pp. 173-199; Butlin 1994, pp. 2-3; Meredith and Oxley 2005;

Seltzer 2015). 9 This exercise makes it possible to locate Australia’s experience within

the growing literature measuring living standards and the related debate about the

Great Divergence (Arroyo Abad et al. 2012; Allen et al. 2001).

Our goal is to provide an estimate of the relative purchasing power of an

average Australian household. We started by collecting prices and wages for New

South Wales (NSW) and Van Diemen’s Land (VDL, to become Tasmania in 1856)

for the two decades between 1820 and 1839, allowing us to estimate the average

yearly expenditure of a typical family at different points in time. 10 Following common

practice (Allen 2001 and 2009; Broadberry et al. 2015), we first construct a “bare

bones” basket, including basic necessities, and a “respectable” basket adding

additional goods to embody a more comfortable living standard. 11 We then use the

price data to cost the basket thus to construct deflators for annual earnings.

9 By the end of the 1820s, Australia’s population had reached 70,000, of which more than 50,000 were

part of the workforce (Butlin, 1994, pp. 34 and 43).

10 NSW and VDL included the overwhelming majority of Australia’s settler population between 1820

and 1839.

11 Following Allen (2001; 2009) we consider an average working class family to be made up of four

me mbe rs, turned into “adult equivalents” by multiplying the cost of a basket for one person by three

and then adding an allowance for rent equal to 5 percent of the “bare bones” budget and 11 percent of

the “respectable” budget as suggested by Coghlan (1918, vol.1) and McLean and Woodland (1992).

While the four-me mber-family assumption ensures that comparisons between countries and times

standardize family size, it may understate Australian living standards in the 1820s and 1830s since,

given male dominance, families were less numerous and single person households more common.

Family size information for this period is scarce, but we are still looking.

More magazines by this user
Similar magazines