The usual biases in our scholarly search have distorted our view of international differences in average income in three ways.
First, using common wage rates as proxies for national income per person has hidden the contribution of property-income growth to the overall rise of national income. Second, focusing on food prices has probably hidden part of the west European rise of real income per person for the long periods 1500—1640s and 1740s—1800s, since food prices rose dramatically relative to other prices.
Third, perhaps a PPP (Purchasing Power Parity) bias in international price comparisons has overstated the levels, rather than the trends, of international real-income differences, as has happened consistently in the second half of the twentieth century.Recent work by Jan Luiten van Zanden and Robert Allen has already supported this third point about PPP bias in the sixteenth through eighteenth centuries (van Zanden 1999; Allen 2001, 2003). Comparing the prices of grain and a few other products across regions and nations, they find that prices are higher where wages are higher, when both are measured in silver. Here is an initial sense in which international comparisons of incomes, in this case the daily wage in grams of silver, may overstate early modern differences in real purchasing power. A deeper exploration of PPP bias in comparing levels of income or consumption will require gathering data on more goods and services, including many non-tradables, and converting them into grams of silver per modern metric unit. Pursuing this third kind of bias must await a laborious comparison of archaic units of measurement from across Europe and around the world. Here we can only make the first two points, those relating to the overemphasis on ordinary workers' wages and on food prices.
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