Wages, prices and living standards in Spanish America: evidence from Lima

By relying on information on wages from primary sources, I estimate welfare ratios in Lima in 1757-1819. I use two alternative methods to estimate the subsistence basket and welfare ratios. The results indicate that working families in Lima faced severe difficulties to cover their basic needs if they did not deviate from typical consumption habits. However, they could cover their nutritional and other basic needs if they replaced expensive foods, such as meats and bread, with cheaper sources of nutrients, such as maize flour. An international comparison shows that the welfare ratio in Lima was lower than the ratios in Northern Europe and North America. However, Lima compared well to several important European cities, such as Paris, Munich and Toledo.

Automated summary

By analyzing welfare ratios in Lima from 1757 to 1819, it was found that working families faced challenges in meeting their basic needs if they did not deviate from their typical consumption habits. However, by substituting expensive foods with cheaper alternatives, such as maize flour, they were able to meet their nutritional and other essential needs. The welfare ratio in Lima was lower than that in Northern Europe and North America, but comparable to several important European cities like Paris, Munich, and Toledo.