IDEAS home Printed from https://ideas.repec.org/a/cup/jechis/v70y2010i02p351-377_00.html
   My bibliography  Save this article

Railways and Price Convergence in British India

Author

Listed:
  • Andrabi, Tahir
  • Kuehlwein, Michael

Abstract

The period 1861 to 1920 witnessed sharp price convergence in British Indian grain markets. Previous research attributed this to the construction of railways. But tests examining price differences between districts provide surprisingly weak support for that hypothesis. Railways mattered, but seem capable of explaining only about 20 percent of the decline in price dispersion. One explanation may be that India was a partially integrated economy at the time of railroad expansion. Lines connecting districts on preexisting trade routes had very small price effects. There is also some evidence of a “border effect” on lines between British India and princely states.

Suggested Citation

  • Andrabi, Tahir & Kuehlwein, Michael, 2010. "Railways and Price Convergence in British India," The Journal of Economic History, Cambridge University Press, vol. 70(2), pages 351-377, June.
    • Handle: RePEc:cup:jechis:v:70:y:2010:i:02:p:351-377_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022050710000318/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Engel, Charles & Rogers, John H, 1996. "How Wide Is the Border?," American Economic Review, American Economic Association, vol. 86(5), pages 1112-1125, December.
    2. Studer, Roman, 2008. "India and the Great Divergence: Assessing the Efficiency of Grain Markets in Eighteenth- and Nineteenth-Century India," The Journal of Economic History, Cambridge University Press, vol. 68(2), pages 393-437, June.
    3. Charles Engel & John H. Rogers & Shing-Yi Wang, 2003. "Revisiting the Border: an assessment of the law of one price using very disaggregated consumer price data," International Finance Discussion Papers 777, Board of Governors of the Federal Reserve System (U.S.).
    4. Collins, William J., 1999. "Labor Mobility, Market Integration, and Wage Convergence in Late 19th Century India," Explorations in Economic History, Elsevier, vol. 36(3), pages 246-277, July.
    5. Jacks, David S., 2006. "What drove 19th century commodity market integration?," Explorations in Economic History, Elsevier, vol. 43(3), pages 383-412, July.
    6. McAlpin, Michelle Burge, 1979. "Dearth, Famine, and Risk: The Changing Impact of Crop Failures in Western India, 1870–1920," The Journal of Economic History, Cambridge University Press, vol. 39(1), pages 143-157, March.
    7. Michael R. Haines & Robert A. Margo, 2006. "Railroads and Local Economic Development: The United States in the 1850s," NBER Working Papers 12381, National Bureau of Economic Research, Inc.
    8. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-361, May.
    9. Fremdling, Rainer, 1977. "Railroads and German Economic Growth: A Leading Sector Analysis with a Comparison to the United States and Great Britain," The Journal of Economic History, Cambridge University Press, vol. 37(3), pages 583-604, September.
    10. Kevin H. O'Rourke & Jeffrey G. Williamson, 2001. "Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650592, April.
    11. Dobado, Rafael & Marrero, Gustavo A., 2005. "Corn Market Integration in Porfirian Mexico," The Journal of Economic History, Cambridge University Press, vol. 65(1), pages 103-128, March.
    12. Matthew Slaughter, 2001. "Does trade liberalization converge factor prices? Evidence from the antebellum transportation revolution," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(3), pages 339-362.
    13. Metzer, Jacob, 1974. "Railroad Development and Market Integration: The Case of Tsarist Russia," The Journal of Economic History, Cambridge University Press, vol. 34(3), pages 529-550, September.
    14. Coleman, Andrew, 2005. "Storage, transport and the law of one price: evidence from nineteenth century U.S. corn markets," 46th Annual Transportation Research Forum, Washington, D.C., March 6-8, 2005 208149, Transportation Research Forum.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dan Bogart & Latika Chaudhary, 2012. "Regulation, Ownership, and Costs: A Historical Perspective from Indian Railways," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 28-57, February.
    2. Fenske, James & Kala, Namrata, 2021. "Linguistic Distance and Market Integration in India," The Journal of Economic History, Cambridge University Press, vol. 81(1), pages 1-39, March.
    3. Sam Jones & César Salazar, 2021. "Infrastructure Improvements and Maize Market Integration: Bridging the Zambezi in Mozambique," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 620-642, March.
    4. Hayakawa, Kazunobu & Tsubota, Kenmei, 2022. "The impact of highways on commodity prices: The price of butter in Japan," Journal of Asian Economics, Elsevier, vol. 81(C).
    5. Chilosi, David & Federico, Giovanni, 2015. "Early globalizations: The integration of Asia in the world economy, 1800–1938," Explorations in Economic History, Elsevier, vol. 57(C), pages 1-18.
    6. Fenske, James & Kala, Namrata & Wei, Jinlin, 2023. "Railways and cities in India," Journal of Development Economics, Elsevier, vol. 161(C).
    7. Guo, Yibei & Dong, Baomin, 2021. "Railway and trade in modern China: Evidence from the 1930s," China Economic Review, Elsevier, vol. 69(C).
    8. Tahir Andrabi & Sheetal Bharat & Michael Kuehlwein, 2021. "Information And Price Convergence:Telegraphs In British India," BASE University Working Papers 04/2021, BASE University, Bengaluru, India.
    9. Obaco, Moisés & Pontarollo, Nicola & Mendieta Muñoz, Rodrigo & Díaz-Sánchez, Juan Pablo, 2022. "On the association between housing deprivation and urban size: Evidence from South Asia," World Development, Elsevier, vol. 157(C).
    10. Matthew McCartney, 2018. "The China-Pakistan Economic Corridor (CPEC): Considering Contemporary Pakistan through Old-Fashioned Economics and Historical Case Studies," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 23(2), pages 19-48, July-Dec.
    11. Bassino, Jean-Pascal & van der Eng, Pierre, 2019. "Japan and the Asian Divergence: Market Integration, Climate Anomalies and Famines during the 18th and 19th Centuries," CEI Working Paper Series 2018-18, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    12. Bertazzini, Mattia C., 2018. "The long-term impact of Italian colonial roads in the Horn of Africa, 1935-2000," Economic History Working Papers 87074, London School of Economics and Political Science, Department of Economic History.
    13. Colleoni, Marco, 2024. "The long-term welfare effects of colonial institutions: Evidence from Central India," Journal of Development Economics, Elsevier, vol. 166(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tahir Andrabi & Sheetal Bharat & Michael Kuehlwein, 2021. "Information And Price Convergence:Telegraphs In British India," BASE University Working Papers 04/2021, BASE University, Bengaluru, India.
    2. Federico, Giovanni, 2007. "Market integration and market efficiency: The case of 19th century Italy," Explorations in Economic History, Elsevier, vol. 44(2), pages 293-316, April.
    3. Dan Bogart & Latika Chaudhary & Alfonso Herranz-Loncan, 2015. "The Growth Contribution of Colonial Indian Railways in Comparative Perspective," CEH Discussion Papers 033, Centre for Economic History, Research School of Economics, Australian National University.
    4. Uebele, Martin, 2011. "National and international market integration in the 19th century: Evidence from comovement," Explorations in Economic History, Elsevier, vol. 48(2), pages 226-242, April.
    5. Keller, Wolfgang & Shiue, Carol H., 2007. "The origin of spatial interaction," Journal of Econometrics, Elsevier, vol. 140(1), pages 304-332, September.
    6. Wolfgang Keller & Carol H. Shiue, 2008. "Institutions, Technology, and Trade," NBER Working Papers 13913, National Bureau of Economic Research, Inc.
    7. Jacks, David S., 2005. "Intra- and international commodity market integration in the Atlantic economy, 1800-1913," Explorations in Economic History, Elsevier, vol. 42(3), pages 381-413, July.
    8. Allen, Robert C., 2014. "American Exceptionalism as a Problem in Global History," The Journal of Economic History, Cambridge University Press, vol. 74(2), pages 309-350, June.
    9. Wolfgang Keller & Carol H. Shiue, 2016. "Market Integration as a Mechanism of Growth," CESifo Working Paper Series 6070, CESifo.
    10. Martin Uebele & Daniel Gallardo-Albarr�n, 2015. "Paving the way to modernity: Prussian roads and grain market integration in Westphalia, 1821-1855," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 63(1), pages 69-92, March.
    11. Matthias Morys & Guillaume Daudin & Kevin H. O'Rourke, 2008. "Globalization, 1870-1914," Economics Series Working Papers 395, University of Oxford, Department of Economics.
    12. Matthias Morys & Guillaume Daudin & Kevin H. O'Rourke, 2008. "Globalization, 1870-1914," Economics Series Working Papers 395, University of Oxford, Department of Economics.
    13. Matthew McCartney, 2018. "The China-Pakistan Economic Corridor (CPEC): Considering Contemporary Pakistan through Old-Fashioned Economics and Historical Case Studies," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 23(2), pages 19-48, July-Dec.
    14. repec:hal:spmain:info:hdl:2441/6145 is not listed on IDEAS
    15. repec:spo:wpmain:info:hdl:2441/6145 is not listed on IDEAS
    16. Jacks, David S., 2009. "On the death of distance and borders: Evidence from the nineteenth century," Economics Letters, Elsevier, vol. 105(3), pages 230-233, December.
    17. Studer, Roman, 2008. "India and the Great Divergence: Assessing the Efficiency of Grain Markets in Eighteenth- and Nineteenth-Century India," The Journal of Economic History, Cambridge University Press, vol. 68(2), pages 393-437, June.
    18. Lawrence Edwards & Neil Rankin, 2016. "Is Africa integrating? Evidence from product markets," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(2), pages 266-289, March.
    19. Mario J. Crucini & Gregor W. Smith, 2016. "Distance and Time Effects in Swedish Commodity Prices, 1732–1914," NBER Working Papers 22175, National Bureau of Economic Research, Inc.
    20. Kano, Kazuko & Kano, Takashi & Takechi, Kazutaka, 2013. "Exaggerated death of distance: Revisiting distance effects on regional price dispersions," Journal of International Economics, Elsevier, vol. 90(2), pages 403-413.
    21. Martin Cincibuch & Jiří Podpiera, 2006. "Beyond Balassa–Samuelson: Real appreciation in tradables in transition countries1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(3), pages 547-573, July.
    22. Bruno Versailles, 2012. "Market Integration and Border Effects in Eastern Africa," Economics Series Working Papers WPS/2012-01, University of Oxford, Department of Economics.

    More about this item

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Historical Economic Geography

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jechis:v:70:y:2010:i:02:p:351-377_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jeh .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.