Wages, prices, and living standards in China, 1738–1925, in comparison with Europe, Japan, and India PDF

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Robert Allen et al (2011) Wages, Prices and Living Standards in China, 1738-1925: in comparison with Europe, Japan, and India

o What are Allen et al.’s research question and hypotheses? Research question – what are the differences in wages, prices, and living standards compared to Europe and China from the 18th to 20th century. Hypothesis – Adam Smith hypothesis: ‘The difference between the money price of labour in China and Europe is still greater than that between the money price of subsistence; because the real recompence of labour is higher in Europe than in China’ Authors hypothesis: Adam Smith’s hypothesis holds, however, only for northern Europe, South and eastern and central Europe did not have significantly better economic situation compared to China “Adam smith neglected regional variation and thereby over-generalised the comparison of Europe and China.” P31

o In what ways are Allen’s et al’s research question different from the ones we saw last week in Ichnio and Schündeln, Milgram, Wells et al., or Habyarimana et al.? Allen’s et al’s research question looks at multiple country comparisons through a long period of time (studying cities rather than countries but this is still representative of the overall trends of the countries/ continents)

o What type of data did Allen et al. collect? (Try to describe its key aspects). PANEL (why?) - because there is a need to study data overtime, with the same cities, in order to determine if there were any changes in development (wages, prices, living standards). ‘This article, by assembling and constructing systematic data on wages and prices from Imperial ministry records, merchant account books, and local gazetteers, is an attempt to fill that gap for China in the eighteenth and nineteenth centuries’ – wages of labourers Historical data also. Combining disparate information in order to piece together the wage history of China (because no single source covers the whole period from 18th to 20th century) Cities looked at included: London, Amsterdam, Suzhou, Beijing, Canton

o What are the validity challenges that Allen et al. face? “”Clearly, our database on China could be greatly improved and we do not claim to have given the final answer to this question.” P31 - acknowledgement by authors that the database could be improved and that further research/findings would be beneficial. The availability of data is the main challenge to validity.

Potentially a validity challenge could be the places (cities) which are compared

o What type of validity is a bigger concern to Allen et al., external or internal validity? External validity – making sure that, even though the study looks at data from cities rather than data from countries, the study can still be generalisable to these countries as a whole. It is the best available data they have and the cities reflect well on Europe and China overall. These cities chosen are a good reflection of the countries that these cities are in - generalisability

o In what ways do Allen et al. establish the external validity of their findings? (Hint: p. 28) By using a comparison of European and Chinese cities rather than European countries and China as a country. Justification for why they use cities (why using cities is valid and adequate) By comparing all Asian welfare ratios. A good sample (the sample is representative of the respective populations of the countries)...