Machinery and horse power prices, 1850-1913

"The debate on industrial revolution (IR) has been focused on the incentives behind investment deci- sions and how the preliminary conditions to allow this phenomena were situated in England. One of the most famous and original theories to explain IR is the developed by (Allen, 2012, 2009b,a), who taking into account a vast literature on organic fuels and the transition to fossil fuels (WRIGLEY, 1962; Wrigley, 2013), argues that the reason why IR was British is the unique combination of expensive labour and cheap en- ergy. This combination produces the incentives to invest in labour saving machinery. Several works have proved the existence of cheap fossil fuels during the XIX century, determined by the introduction of coal. Figures and indicators on wages and energy are broadly accepted, however, machinery price indexes are at least discussed and the elaboration of the most used index is based almost completely in the iron price (Feinstein (1972, 1988). To prove the Allen hypothesis we require a better index on machinery, measur- ing horsepower prices, relative costs and changes in their international trade. Using novel data based on merchants catalogues, several international trade statistics plus all the price indexes available, this article presents a improved machinery price index for UK in the period 1850 - 1913; given the influence of British Machinery & Equipment in the world market until 1913, this price index could be useful to understand relative costs transformation in several regions."