Prices, Wages, and Welfare in Early Colonial South Australia, 1836-1850

From first settlement of South Australia (SA) in November 1836, the colony underwent a series of crises due to delays in surveying and distributing lands, producing crops, and employing new migrants. Histories of this period emphasize that a combination of high food prices and high wages burdened the government and new farms. To check and refine standard explanations for early colonization crises, we employ a number of sources, including SA newspapers and colonial government blue books, to develop monthly series for prices, wages, and the cost of “respectable†and “bare bones†consumption baskets over the 1838-1850 period. We use Corden’s model of a booming economy with traded and non-traded goods to understand how various shocks, including the 1840 stop in immigration and the 1844/1845 copper discoveries, could have affected the SA economy. We find that the model’s implications are consistent with changes in our newly developed SA data series.