Compare methods

	Historical GDP Back-Projection	Real-Wage and Welfare-Ratio Analysis
Field	Economic History	Economic History
Family	Process / pipeline	Process / pipeline
Year of origin	2001	2001
Originator	Angus Maddison; with indicator methods from Robert Allen, Paolo Malanima, and Jan Luiten van Zanden	Robert C. Allen (building on the Phelps Brown-Hopkins tradition)
Type	descriptive-extrapolation	Living-standards index construction
Seminal source	Maddison, A. (2007). Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History. Oxford University Press. ISBN: 9780199227204	Allen, R. C. (2001). The Great Divergence in European Wages and Prices from the Middle Ages to the First World War. Explorations in Economic History, 38(4), 411-447.
Aliases	Maddison back-projection, Indicator-based GDP estimation, Retrospective GDP extrapolation, Benchmark-and-interpolation GDP	Allen welfare ratio, Subsistence-basket real wages, Bare-bones and respectability baskets, Purchasing-power wage analysis
Related	3	4
Summary	Historical GDP back-projection estimates long-run income for periods too thinly documented for full national accounting. Rather than rebuilding sectoral value-added year by year, it anchors to a handful of relatively secure benchmark estimates and fills the gaps between and before them using indirect indicators that move with income, chiefly the share of population living in towns, real wages of building labourers, agricultural productivity, and population density. The logic, associated above all with Angus Maddison and developed further by Allen, Malanima, and van Zanden, is that these indicators bear a stable, theoretically grounded relationship to per-capita output, so their movements can proxy GDP growth where direct measurement is impossible. The method has produced the multi-century per-capita income series that frame debates about pre-modern stagnation, Malthusian dynamics, and the European Little Divergence, while remaining explicitly more uncertain than bottom-up accounts.	Real-wage and welfare-ratio analysis measures the material living standards of working people by asking a deceptively simple question: how many baskets of basic goods could a worker's earnings buy? Robert Allen, refining the older Phelps Brown-Hopkins price-and-wage tradition, devised the welfare ratio—annual household earnings divided by the annual cost of a fixed consumption basket scaled to subsist a family. By specifying a spartan bare-bones basket meeting minimum calorie and nutrient needs, and a more generous respectability basket, and by converting wages and prices into grams of silver, Allen made living standards comparable across the great cities of Europe and Asia and across many centuries. The method underpinned his Great Divergence findings, showing that London and Amsterdam workers enjoyed welfare ratios far above bare subsistence while many Asian and southern European labourers hovered near it. It has become the workhorse for cross-cultural comparison of pre-industrial living standards.