NOTES ON Three centuries of UK GDP and Seven Centuries of English GDP

The UK GDP data on the measuringworth.com site are derived from the Bank of England's A millennium of macroeconomic data dataset. Estimates of GDP in current and constant prices and population are provided for three geographically-consistent regions:

(i) The United Kingdom on its current post-1922 borders - 1700-2016

Geographically this consists of Great Britain + the six counties of Northern Ireland. As a political unit the United Kingdom of Great Britain and Northern Ireland has been in existence since 1922.

(ii) England - 1270-1700

This consists of the counties of England excluding Monmouthshire. This area does not include Scotland, Wales or any part of Ireland. This series can be used to extrapolate the series for the UK before 1700 if users wish to, but is not shown in level terms.

(iii) The United Kingdom on its pre-1922 borders - 1801-1920

The whole of Ireland was part of the UK from 1801 until 1922 when Southern Ireland gained independence. This data allows users to view the level of GDP in the UK as defined at the time. From 1922 only the six counties of Northern Ireland remained part of the UK. However 1920 is commonly used as a convenient end point for the pre-1922 definition of the UK.

The Bank of England's dataset additionally contains estimates of GDP for Great Britain, Ireland, both Northern and Southern. There are also consistent time series for English and Great Britain GDP that lead up to the present day.

I Background and Method

The Bank's dataset provides estimates of GDP at factor cost, basic prices and market prices. To be consistent with other country estimates on the measuringworth.com site only market price estimates are shown on this site.

The main method is to work backwards from the latest official estimates of GDP produced by the Office for National Statistics (ONS) using various historical estimates from the literature.

As is well known, GDP can be measured using expenditure, income and output-based approaches. Estimates using each of the three approaches can be averaged to create 'compromise' measures that implicitly place equal weight on all three estimates. Alternatively the measures can be balanced where judgement is placed on the reliability of each series, and the relative degree of reliability is then used to weight the series together. Balanced estimates can also be produced for particular benchmark years using input-output analysis where the researcher attempts to make the three estimates consistent using knowledge about the industrial structure and spending patterns in the economy for that year. Typically for the C19th such analysis is only feasible for years when a population census was carried out.

Various historical estimates for the UK exist using each of the three approaches. The main work on the UK in the C19th and first half of the C20th was carried out by Charles Feinstein in his 1972 volume National Income, Expenditure and Output of the United Kingdom 1855-1965. This monumental work, which is still the bedrock of UK estimates over this period, built on the earlier contributions of many scholars such as Bowley, Stamp, Clark, Deane, Stone, Jeffreys, Walters, Prest, Chapman, Hoffman and Lewis amongst others. Work improving the estimates of industrial production and output during the industrial revolution was subsequently carried out by Crafts and Harley in the 1980s. Martin Weale in a series of collaborations (Horrell, Humphries and Weale (1994), Sefton and Weale (1995) and Solomou and Weale (1991) pioneered the work on balanced estimates in the UK and constructed an input-output table for the UK in the census year of 1841. Ongoing work by Mark Thomas, building on earlier collaboration with Charles Feinstein, is aiming for a similar input-output table for 1851. More recently the path-breaking work of Broadberry, Campbell, Overton, Klein and van Leeuwen (2015), who took on the task of reconstructing the growth of output and population in England and Great Britain between 1270-1870, now allows comparisons of GDP per capita to be made over seven centuries.

For many years little was known about the exact pattern of growth in Ireland especially during the C19th when Ireland experienced the Great Famine and the large overseas emigration that followed. That situation has now changed and major contributions have recently been made by Geary and Stark (2004, 2015 and 2016) in a series of papers on regional growth in the UK, and Andersson and Lennard (2016) who have constructed annual estimates for Ireland for the 1842-1913 period.

The various historical estimates of GDP for the UK and Ireland often cover different geographical areas and different time periods. The challenge is to try and construct continuous times series for the three geographically-consistent areas discussed above using the best available compromise and balanced estimates incorporating the information from each of the three approaches to measuring GDP.

II Sources and construction

The details of the construction of the series can be found in the relevant worksheets of the Bank of England's dataset. This provides all the underlying data series and the relevant calculations and formulae used in the construction of the GDP estimates. A summary is provided below:

1948 onwards

All UK estimates for this period are on the basis of post-1922 UK borders (Great Britain + Northern Ireland) and are derived from official Office of National Statistics (ONS) estimates of GDP. Estimates for Great Britain and England are obtained from ONS regional data back to 1997. Prior to this shares of regional GDP have been estimated by Geary and Stark (2016) using regional wage data by sector. These shares are interpolated and used to construct estimates for England, Northern Ireland and Great Britain.

1920-1948

The UK data for this period are based on the balanced estimates of GDP by Sefton and Weale (1995). They used Feinstein's (1972) estimates of GDP, constructed using all three approaches. Instead of constructing a simple average 'compromise measure' they used a least-squares approach to weight the three estimates according their underlying reliability. The current price estimates for 1948 by Sefton and Weale are very similar to current ONS estimates for GDP at current prices in the same year despite Sefton and Weale's estimates being based on the pre-ESA95 system of national accounts. The series are linked using the ratio of the two series in 1948. The constant price estimates at 1938 prices are linked to the ONS chained volume measures in the same way.

To obtain estimates of Great Britain GDP the regional shares of Geary and Stark (2016) are used for census benchmark years. Those shares are interpolated linearly and are then applied to UK nominal GDP to obtain estimates for Great Britain, England and Northern Ireland. Constant price estimates for England and Northern Ireland are then derived by deflating by the UK GDP deflator. Volume measures for Great Britain are then derived by removing the contribution of Northern Ireland from the UK estimates.

1841-1913

There are a number of estimates for Great Britain, Ireland and UK GDP available over this period.

' Output-based measures. Feinstein (1972) constructed estimates between 1855 and 1920 for both Great Britain and the UK. Since then Broadberry et al (2015) have constructed current price and volume measures for Great Britain between 1700 and 1870. Andersson and Lennard (2016) have similarly constructed estimates for Ireland between 1841 and 1913 benchmarked to the decadal estimates of Irish GDP implied by the regional shares of Geary and Stark (2015) based on sectoral wage data.

' Expenditure-based estimates. Feinstein constructed expenditure-based estimates of UK GDP using an initial set of estimates from his (1972) volume which he subsequently pushed back to 1830 using earlier work by Deane (1968), and his own work on investment and trade in Feinstein and Pollard (1988). These improved estimates were published in Mitchell (1988). Estimates are available on a constant and current price basis.

' Income-based estimates. Feinstein (1972) constructed current price income estimates back to 1855. These estimates are in the process of being improved based on Feinstein's later research into C19th wages and will appear in a future revision of these series once these have been peer reviewed.

' Compromise and Balanced Estimates. Feinstein himself provided compromise estimates based on an average of the three estimates he constructed. Solomou and Weale (1989) provide balanced estimates based on Feinstein's (1972) data for the 1870-1913 period using Feinstein's subjective assessment about the reliability of each of the series. Horrell et al (1994) provided an input-output table benchmark for the UK GDP in 1841.

To create series for this period the following steps were taken. First a new output-based estimate for the UK was constructed for the 1841-1870 period using the Broadberry et al (2015) and Andersson and Lennard (2016) estimates for Great Britain and Ireland respectively. The constant price estimates for Great Britain and Ireland were annually chain-linked to obtain a new output-based volume series for the UK. Andersson and Lennard (2016) note the difficulty of obtaining a GDP deflator for Ireland. So in current price terms the Andersson and Lennard (2016) estimates for real GDP for Ireland were multiplied by their estimates of the CPI based on the work of Brunt and Cannon . The resulting series was then benchmarked to decadal estimates of Irish nominal GDP based on the Geary and Stark GDP share for Ireland between 1861-1920 applied to Broadberry et al's (2015) estimates for Great Britain. Prior to 1861 applying the UK GDP deflator to the constant price estimates for Ireland yielded a nominal GDP level for 1844 close to Mokyr's (1985) estimate of GDP for Ireland of between '75-85mn. Compromise measures were constructed using this new output-based estimate and Feinstein's expenditure measure over the 1841-1855 period and a similar compromise measure was constructed for the 1855-1870 period that additionally incorporates information from Feinstein's 1855 income estimate. In current price terms, the 1830-55 compromise estimate was close to the 1841 input-output table benchmark of '527mn for the UK. So the compromise series was benchmarked to this point and extended using the 1855-70 compromise estimate, based on all three measures.

From 1870-1913 the balanced estimates for current price and constant price GDP from Solomou and Weale (1991) were used to extend the series to 1913. Finally these were the extrapolated to 1920 using Feinstein's compromise estimate for the UK in Mitchell (1988).

Estimates for Great Britain, England and Northern Ireland were again constructed from the regional share estimates of Geary and Stark (2015a, 2015b). This allows a geographically-consistent measure of UK GDP on a post-1922 definition to be constructed. The resulting estimate for this area for 1920 of '5.5b is almost identical to that of Sefton and Weale's balanced estimate for 1920. This means there is a relatively seamless link between the pre and post-1920 estimates for the UK on post-1922 borders.

1700-1841

For this period the balanced/compromise series for Great Britain from 1841 onwards was extended back to 1700 using Broadberry et al's output-based estimates for nominal and real GDP.

The data for Ireland were extended back beyond 1841 using the nominal and real wage estimates of Geary and Stark (2004). The growth of Irish wages relative to Great Britain wages are used as a benchmark to assess the relative growth in Irish per capita incomes assuming wages are roughly proportional to average productivity. Given Irish population growth and GB per capita incomes this can be used to obtain an estimate of Irish GDP on a current price and chained volume basis at factor cost back to 1765, which in principle can then be extrapolated further back to provide a very rough estimates for 1700. However on a market price basis estimates are limited to 1801 given available tax data and these are the estimates shown in measuring worth.

These two steps allow an output-based estimate of UK GDP based on pre-1922 borders to be constructed back to 1700. So for the UK over the 1830-1841 period the compromise measure of UK GDP using an output-based measure can be combined with Feinstein's expenditure estimate to project the UK compromise series back to 1830. Before 1830 UK GDP is extrapolated backwards using just the output-based measure for the UK.

To obtain a geographically-consistent measure for the UK on a post-1922 basis, estimates of Northern Irish GDP were first obtained by assuming the same growth in per capita GDP as the rest of Ireland which were then combined with population estimates of Northern Ireland to create a series for GDP back to 1801.  These were then combined with the Great Britain series on a current and chained-volume basis to obtain a geographically consistent measure based on post-1922 borders.  Prior to 1801 the series for the UK on a post-1922 basis are assumed to grow in line with Great Britain GDP, given the lack of Northern Irish population data and the uncertainty about Irish per capita incomes. English GDP was derived using the share in Great Britain GDP for 1700 from Broadberry et al (2015) and the implied share for 1861 by Geary and Stark (2015). A linear interpolation was carried between the two share estimates and this was applied to the measure of Great Britain GDP. A chained volume estimate was derived by dividing this by the GDP deflator for Great Britain.

1270-1700

Estimates for this period are only available for England. The compromise series at current and constant prices for English GDP in 1700 at factor cost was projected backwards in time using the series for English GDP at factor cost by Broadberry et al (2015). For nominal GDP at market prices estimates of taxation for the pre-1700 period are added to GDP at factor cost in current price terms but for simplicity volumes in market prices are assumed to grow in line with real GDP at factor cost.

III Population estimates used for the per capita series

From the mid C19th the population estimates are sourced from census estimates. Prior to that the estimates for England and Great Britain are derived from Broadberry et al. (2015) based on earlier work by Wrigley and Schofield and assumptions about the population of Scotland and Wales. Irish population estimates prior to 1841 are obtained from the estimates available in Mitchell (1988) and the Maddison dataset which in turn were based on the estimates of Connell (1950), Lee (1981) and Daultrey et al (1981). The population of Northern Ireland is available back to 1821 when it was around 19% of that of Ireland as a whole. Prior to this point it is assumed to grow in line with the rest of Ireland and so that share is maintained back to 1700. This is clearly a strong assumption and so the estimates that rely on this series are more uncertain than others.

References

Andersson, F and Lennard, J (2017), 'Irish GDP between the Famine and the First World War: Estimates based on a Dynamic Factor Model', Lund University Department of Economics Working Paper.

Broadberry, S, Campbell, B, Klein, A, Overton, M and van Leeuwen, B, (2015), British Economic Growth, 1270-1870, Cambridge University Press.

Brunt, L and Cannon, E, (2004), 'The Irish grain trade from the Famine to the First World War', Economic History Review, Vol. 57, No. 1, pages 33-79.

Connell, K, (1950), The Population of Ireland 1750-1845, Clarendon Press, Oxford.

Daultrey, S, Dickson, D and ' Gr'da, C (1981), 'Eighteenth Century Irish Population: New Perspectives from Old Sources', Journal of Economic History, Volume 41, no 3, pages 601-628.

Deane, P (1968), 'New estimates of Gross National Product for the United Kingdom 1830-1870', The Review of Income and Wealth, Vol. 14 (2), pages 95-112.

Feinstein, C H (1972), National income, output and expenditure of the United Kingdom 1855-1965, Cambridge: Cambridge University Press.

Geary, F and Stark, T (2004), 'Trends in real wages during the industrial revolution: a view from across the Irish Sea', The Economic History Review, Vol. 57, No.2, pages 362-395.

Geary, F and Stark, T (2015a), 'Regional GDP in the UK, 1861–1911: new estimates', The Economic History Review, Vol. 68, No.1, pages 123-144.

Geary, F and Stark, T (2015b), '150 years of regional GDP: United Kingdom and Ireland', mimeo

Horrell, S, Humphries, J and Weale, M (1994), 'An input-output table for 1841', The Economic History Review, Vol. 47, No. 3, pages 545-566.

Lee, J (1981) 'On the accuracy of pre-famine Irish censuses' in Goldstrom and Clarkson, eds. Irish Population, Economy, and Society: Essays in Honour of the Late K.H. Connell, Oxford University Press, Oxford, pages 37-56.

Mitchell, B R (1988), British Historical Statistics, Cambridge University Press, Cambridge.

Mokyr, J (1985), Why Ireland Starved: A Quantitative and Analytical History of the Irish

Economy, 1800-1850, George Allen & Unwin.

Sefton, J and Weale, M (1995), Reconciliation of National Income and Expenditure: balanced estimates of national income for the United Kingdom,1920-1990, Cambridge University Press.

Solomou, S N and Weale, M (1991), 'Balanced estimates of UK GDP 1870-1913', Explorations in Economic History, Vol. 28, No. 1, pages 54-63.