States, Latin America and China. The data suggest that Australians enjoyed higher

living standards than most other countries, with the exception of London (3.85) and

the United States (4.47), where per capita purchasing power was higher than in

Australia (2.66). 17 Also worth noting are the higher real incomes received in both the

New South Wales (3.60) and Tasmanian (3.47) countryside by the 1830s. Using this

direct approach to compute living standards yields different results relative to

available aggregate measures based on back-casting. In fact, the trends in our PPPbased

estimates differ from the international GDP per capita comparison proposed by

Madsen (2015, pp. 36-37), which place Australia as the richest world economy since

1800, above both other settler colonies and the UK.

To provide a different perspective on living standards we also compute real

purchasing power by deflating Australia’s nominal income, using existing New South

Wales GDP estimates (Sinclair 2009) with a price deflator derived from our “bare

bones” expenditure. We use these estimates to draw a comparison with American and

British purchasing power per capita (Lindert and Williamson 2016a, Chapters 2-6 and

Appendices A-G). We rely on Broadberry et al. (2015) nominal income estimates for

Great Britain, deflated by the cost of its “bare bone” subsistence bundle using Allen’s

prices. 18 Table 5 confirms the welfare ratio findings: Australia had a lower purchasing

power (4.28) than Britain (8.41) and the United States (9.76) in the 1820s. By the

1830s, real GDP per capita was still lower in Australia, but the gap with Britain had

17 Our estimates on American living standards are based on Lindert and Williamson (2016a, Table

10.1). We have interpolated the reported purchasing power of American income per capita for

benchmark years 1800, 1850 and 1860 to get estimates for the 1820s and 1830s.

18 When Allen’s prices were not available, we used Clark’s prices (2006). Both are available from the

Global Price and Income History Group database www.gpih.ucdavis.edu.

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