 Sweet diversity: Colonial goods and the welfare gains from global trade after 1492Jonathan Hersh and Hans-Joachim Voth Explorations in Economic History, 2022, vol. 86, issue C Abstract: When did overseas trade start to matter for living standards? Traditional real-wage indices suggest that living standards in Europe stagnated before 1800. In this paper, we argue that welfare may have actually risen substantially, but surreptitiously, because of an influx of new goods. Colonial “luxuries” such as tea, coffee, and sugar became highly coveted. Together with more simple household staples such as potatoes and tomatoes, overseas goods transformed European diets after the discovery of America and the rounding of the Cape of Good Hope. They became household items in many countries by the end of the 18th century. We apply two standard methods to calculate broad orders of magnitude of the resulting welfare gains. While they cannot be assessed precisely, gains from greater variety may well have been big enough to boost European real incomes by 10% or more (depending on the assumptions used). Keywords: Gains from variety; Global trade; Welfare gains from new goods; Age of discovery; Living standards over the long run (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:86:y:2022:i:c:s0014498322000468 DOI: 10.1016/j.eeh.2022.101468 Access Statistics for this article Explorations in Economic History is currently edited by R.H. Steckel More articles in Explorations in Economic History from Elsevier |
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