Sweet, sweet tobacco

From Sweet diversity: Colonial goods and the welfare gains from global trade after 1492 by Jonathan Hersh and Hans-Joachim Voth.  From the Abstract:

When did overseas trade start to matter for living standards? Traditional real-wage indices suggest that living standards in Europe stagnated before 1800. In this paper, we argue that welfare may have actually risen substantially, but surreptitiously, because of an influx of new goods. Colonial “luxuries” such as tea, coffee, and sugar became highly coveted. Together with more simple household staples such as potatoes and tomatoes, overseas goods transformed European diets after the discovery of America and the rounding of the Cape of Good Hope. They became household items in many countries by the end of the 18th century. We apply two standard methods to calculate broad orders of magnitude of the resulting welfare gains. While they cannot be assessed precisely, gains from greater variety may well have been big enough to boost European real incomes by 10% or more (depending on the assumptions used).

Economic measurements are always difficult, especially historical measurements.  This methodology is good faith but possibly wrong.  But applied consistently it leads to interesting insight.  

As in, it seems that tobacco consumption was a larger improvement in consumer welfare in 1800 than are cell phones and computers today.  

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