Una de Cal y Otra de Arena: Building Comparable Real Wages in A Global Perspective

This paper discusses some of the criticisms recently raised by Rafael Dobado-González about our work on real wages in the Americas in the long run. Although addressing a series of issues, Dobado mainly questions our use of the welfare ratio methodology to assess standards of living in colonial Spanish America. In this article we explain how, despite its limitations, this methodology provides a solid, transparent metric to compare economic development across space and time. In particular, welfare ratios present more economically relevant information on living standards than the commodity wages that Dobado prefers (Dobado González and García Montero 2014). We argue that Dobado fails to offer convincing evidence against our findings; hence, we stand by these results, which suggest that the divergence between North and Latin America began early in the colonial period.