Compare methods

	Real-Wage and Welfare-Ratio Analysis	Price History Reconstruction
Field	Economic History	Economic History
Family	Process / pipeline	Process / pipeline
Year of origin	2001	1944
Originator	Robert C. Allen (building on the Phelps Brown-Hopkins tradition)	International Scientific Committee on Price History (Beveridge, Hamilton, Posthumus); Ernest Labrousse
Type	Living-standards index construction	Price-series compilation and indexing
Seminal source	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.	Labrousse, E. (1944). La crise de l'economie francaise a la fin de l'Ancien Regime et au debut de la Revolution. Presses Universitaires de France. ISBN: 9782130436201
Aliases	Allen welfare ratio, Subsistence-basket real wages, Bare-bones and respectability baskets, Purchasing-power wage analysis	Mercuriale-based price series, Commodity price indexing, Labrousse price history, Conjunctural price analysis
Related	4	4
Summary	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.	Price history reconstruction is the foundational empirical craft of assembling long, continuous series of commodity prices and wages from the scattered archival record—account books of hospitals, colleges and monasteries, official market price postings known in France as mercuriales, customs and tithe records, and merchants' ledgers. Institutionalised by the International Scientific Committee on Price History in the interwar years, with William Beveridge, Earl Hamilton and N. W. Posthumus assembling national series, and given analytical depth by Ernest Labrousse's study of the conjuncture of the French Old Regime, the method turns raw quotations into standardised, spliced and weighted price indices. These series are the bedrock on which real-wage analysis, monetary history, and the study of economic crises all rest. Labrousse's anatomy of the cyclical movement of grain prices—and its role in the coming of the French Revolution—showed how price history could illuminate not just secular trends but the short-run conjunctures that shaped social and political upheaval.