Price and quantity indices of food imports in Malta : 1856-1938

In their annual Blue Books for the Maltese colony, the British kept meticulous records on both prices and quantities of every imported commodity, producing a rich and complete data set of imports for that period. This paper uses the data collected by the customs officers during the British rule in Malta, between 1856 and 1938, to calculate several indices to find the general price level of food imports, imported inflation, and the level of food quantities imported. The paper also attempts to compare the price level in the Maltese Islands with that in other countries. Price and quantity indices are produced for a number of individual commodities and for aggregate imports. Three different index number formulae are employed in the paper, namely the Laspeyres, Paasche, and Fisher. Overall indices are constructed using two alternative methods: first using the basic specification of each of the three methods, and then using yearly updated expenditure weights the chain-linked method. Although the data set is simple and uncomplicated by today's standards, one notes that the indices provide an excellent insight in the computation of the price level of imported goods and standard of living in Malta during the British rule. The authors acknowledge excellent research assistance from Daniel Castillo and Daphne Vassallo. Research undertaken is not in any way related to the full-time employment of the co-author. Hence the views expressed in this paper are solely those of the authors and do not necessarily reflect the views of the Central Bank of Malta. 1. Background and the Data Set For most of the colonial period, the British produced an annual Blue Book (not necessarily referring to a calendar year) for the Maltese Islands. These Blue Books covered the years 1821 to 1938, and documented information and statistics on a number of economic and social aspects of the colony. To give some examples, one can find information on the population, wages, pensions, government workers, public revenue and expenditure, hospitals and disease, education, bank deposits, agricultural produce and prices, and data on imports and exports. In all there 81 Blue Books for the Maltese colony that are still available. The only edition that is missing in Malta is the almanac for 1916-1917. This paper focuses on the quantities and prices of the commodities that were imported by the Maltese Islands. For each commodity the Blue Books list the total quantity imported, the quantity imported for home consumption, the value of total imports, and the total duty paid. The quantities used in this paper are those imported for home consumption, while the prices are the unit prices calculated by dividing the total value of imports by the total quantity imported. It is worthwhile to note that for the period 1821 to 1855 the data on imports was very limited, available only for a few commodities. As a result, this period was not taken into consideration for the purposes of this study. In addition, data for the years 1856 to 1910 was only reported for imports of basic food commodities. From the year 1910 onwards one can find additional data on (i) other consumer commodities, (ii) industrial and raw materials, (iii) agricultural goods, and (iv) gold and silver. In view of the above and for the sake of having a standardised data set, this paper employs data for 67 different basic food commodities covering the period 1856 to 1938. Figure 1 plots the total yearly observations for prices. This shows that the total number of observations tended to increase in the later parts of the period under study, specifically after the start of the twentieth century.