Sara Horrell, Jane Humphries and Ken Sneath

Economic History Review 68, 3 (2015) pp830-857

The traditional economic principle is that price and real income affect consumption trend in that the cheaper the production of the good, the greater the falling price, the greater democracy of the good. This was probably the 3rd lesson I learnt in economic history class. (I still remember now one example from my reading that in the far away future, N=1 jeans is going to be extremely cheap. Yes? Maybe? Those elastic stuff Uniqlo sells – does it count?) The authors used an incredibly unique data set to show how consumption involved over time.

The records were stolen property list from robberies and housebreaking between 1750 and 1821 from Old Bailey London.

(Sorry for the annoying colour.) But OMG how cool is that! I am just totally wowed by creative datasets. The authors took pains to show that ordinary people (casual workers) were also robbed by professional robbers, not only the rich. These robbers strip the house completely with no concern about hard to carry items. Like what we see in the shows, robbers have accomplices with carts and wheelbarrows for such big jobs. Robbers focused on items that they could turn into money. In the olden days, there were many things sold in the second hand market and the rich also bought second hand. (It seems to me, shopkeepers were not in the habit of asking where the goods came from.) Most cool was that the data contained the occupations or status of the original owners – eg, Lord, Esquire, Captains, professionals, food sellers, non food sellers, innkeepers. The dataset also contained the value of the goods. With that I can imagine you can build a profile of the spending of the Lord vs, Jeweller or Wine seller or the casual worker.

I was surprised by the things stolen. Cloth was often stolen from high status folk in 1750s but by 1820s they were stolen from more ordinary status folk. Clothing, linen, china, featherbeds, cotton bedcovers, napkins, tablecloths were goods that can be sold easily according to the writers. It was surprising that cotton bedcovers was expensive then and an aspirational purchase even though England has the tech to make cotton bedcovers. Linen is considered less aspirational. Silk was definitely owned more by the higher status folk. Comfort (ie quality improvements) was aspirational such as higher quality silk stockings, higher quality featherbeds, cotton bedcovers (vs linen).

The normal stuff such as notes, coins, watches and silverware was also discussed. One interesting discussion is watches made of silver vs silverware. Watches made of silver become so commonplace by 1750 that normal folk were robbed of their timepieces. Gold watches were for the higher status occupations. Yet quality silverware remain a good for the elite. The suggestion was that watches can bought during sudden prosperity and can be pawned in hard times but silverware which were for mainly for display required the owner to have much more disposable income.

The paper concluded that ownership is a mix of not only the falling prices due to production cost but that fashion of the day was an interplay between aspiration and differentiation. Fascinating paper!

Reading this I started to understand the desire for condo ownership. Property prices have been increasing very fast yet there are young people around me who are keen to live in a condo vs a HDB. HDB should be a much more logical spend – seriously great amenities, more square footage for the buck and so much convenience. Cost of maintenance is way more reasonable because it is shared with many households. But if one considers the condo spend as this not a comfort spend but a motivation to be different, it makes sense. Paying to be different is important to the condo dweller and they are more willing to apportion a greater amount of budget to their family spend. This article also explained why luxury spend such as watches, designer leather goods and jewellery ownership is so prevalent in Singapore but not designer clothing. It’s akin to be being robbed of a silver watch by 1820 is seen for normal status folk because a silver watch is affordable during periods of sudden prosperity and can be pawned off if needed. Luxury goods are seen as a good store of value even though they are just consumables (eg Rolexes) and the value drops significantly. Designer clothing is much less easily changed to money.

An aspirational spend (to increase comfort) that I can think of is robot cleaners, robot cooks. I started with a very early iRobot which was the rough equivalent of a Samsung phone galaxy model. I replaced it with the Roborock S7 4 years ago at around $700 for a new release price. The latest prices have increased to more than double at $1800. I suspect this is a comfort spend that most are willing to spend on for an upgrade. The new model promises better clean yet none of the robots beat a human cleaning the floor daily (vacuum and simple cold water mop). A robot just does not give a clean floor feel like a human cleaning the floor. (WHY?) The closest is if the robot vacuums twice, then mops twice. (Come to think of it, maybe this is why my robot is spoiling so often.) It works slower than a human. Yet we buy it despite the price – so that we don’t have to do it.