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	Historical Inequality Reconstruction	Real-Wage and Welfare-Ratio Analysis
Field	Economic History	Economic History
Family	Process / pipeline	Process / pipeline
Year of origin	2011	2001
Originator	Branko Milanovic, Peter Lindert and Jeffrey Williamson	Robert C. Allen (building on the Phelps Brown-Hopkins tradition)
Type	Inequality estimation from grouped data	Living-standards index construction
Seminal source	Milanovic, B., Lindert, P. H., & Williamson, J. G. (2011). Pre-Industrial Inequality. The Economic Journal, 121(551), 255-272.	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	Social table inequality estimation, Inequality possibility frontier, Extraction ratio analysis, Milanovic-Lindert-Williamson method	Allen welfare ratio, Subsistence-basket real wages, Bare-bones and respectability baskets, Purchasing-power wage analysis
Related	4	4
Summary	Historical inequality reconstruction estimates how unequally income was distributed in pre-industrial societies that left no household surveys, by exploiting social tables—contemporary or reconstructed enumerations of social classes with their populations and average incomes, in the tradition of Gregory King's 1688 anatomy of England. Branko Milanovic, Peter Lindert and Jeffrey Williamson developed the modern framework, computing a Gini coefficient from these grouped data and then placing it in context with two further concepts. The inequality possibility frontier defines the maximum inequality a society could sustain once everyone must receive at least subsistence; because poor societies have little surplus above subsistence to redistribute upward, their feasible inequality is constrained. The extraction ratio—actual inequality divided by this maximum—measures how fully the elite extracted the available surplus. Together these tools let historians compare not just raw inequality but the rapacity of ruling classes across societies of vastly different average income.	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.