Take Britain. In 1688, food was the single largest item of gross domestic expenditure in England and Wales, accounting for 25.7% of the total, with shoes and clothes in second place at around 20% and drinks and tobacco accounting for almost 14%, according to The World Economy: Historical Statistics by Angus Maddison.
At that time transport and communication accounted for just 0.8% of total spending, but by 1996 this had soared to 10.6% in the UK to become the single largest category of expenditure, no doubt thanks to the advent of the car, the aeroplane, the train and, of course, the telephone and related innovations. Food, drink and tobacco combined had shrunk to just 12.5% of the total between them.
How do we know so much about the spending habits of 17th century Britons? Thanks to one Gregory King, who was impressed by the possibilities of using fiscal information for macroeconomic analysis, although he did not publish his work for fear of official disapproval. Mr King’s full 300-page Notebook showing his meticulous procedures and analysis did not come to light until 1917, Mr Maddison says. Nowadays, it is widely referenced on the Internet.
©OECD Observer No 240/241, December 2003