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Interest Rates, Sanitation Infrastructure, and Mortality Decline in Nineteenth-Century England and Wales

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  • Jonathan Chapman

    (New York University Abu Dhabi)

Abstract

This paper investigates whether high borrowing costs deterred investment in sanitation infrastructure in late nineteenth-century Britain. Town councils had to borrow to fund investment, with considerable variation in interest rates across towns and over time. Panel regressions, using annual data from over eight hundred town councils, indicate that higher interest rates were associated with lower levels of infrastructure investment between 1887 and 1903. Instrumental variable regressions show that falling interest rates after 1887 stimulated investment and led to lower infant mortality. These findings suggest that Parliament could have expedited mortality decline by subsidizing loans or facilitating private borrowing.

Suggested Citation

  • Jonathan Chapman, 2021. "Interest Rates, Sanitation Infrastructure, and Mortality Decline in Nineteenth-Century England and Wales," Working Papers 0218, European Historical Economics Society (EHES).
    • Handle: RePEc:hes:wpaper:0218
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    File URL: https://www.ehes.org/wp/EHES_218.pdf
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    References listed on IDEAS

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    1. Robert Millward & Sally Sheard, 1995. "The urban fiscal problem, 1870-1914: government expenditure and finance in England and Wales," Economic History Review, Economic History Society, vol. 48(3), pages 501-535, August.
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    5. Troesken, Werner, 2015. "The Pox of Liberty," University of Chicago Press Economics Books, University of Chicago Press, number 9780226922171, September.
    6. Troesken, Werner & Tynan, Nicola & Yang, Yuanxiaoyue Artemis, 2021. "What are the health benefits of a constant water supply? Evidence from London, 1860–1910," Explorations in Economic History, Elsevier, vol. 81(C).
    7. Wilson, John F., 1997. "The finance of municipal capital expenditure in England and Wales, 1870–19141," Financial History Review, Cambridge University Press, vol. 4(1), pages 31-50, April.
    8. Chapman, Jonathan, 2018. "Democratic Reform and Opposition to Government Expenditure: Evidence from Nineteenth-Century Britain," Quarterly Journal of Political Science, now publishers, vol. 13(4), pages 363-404, October.
    9. TokeS. Aidt & Martin Daunton & Jayasri Dutta, 2010. "The Retrenchment Hypothesis and the Extension of the Franchise in England and Wales," Economic Journal, Royal Economic Society, vol. 120(547), pages 990-1020, September.
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    11. Brown, John C., 1988. "Coping with Crisis? The Diffusion of Waterworks in Late Nineteenth-Century German Towns," The Journal of Economic History, Cambridge University Press, vol. 48(2), pages 307-318, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    interest rates; public investment; sanitation; Britain; urban infrastructure; mortality decline;
    All these keywords.

    JEL classification:

    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • N93 - Economic History - - Regional and Urban History - - - Europe: Pre-1913

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