The focus of the ‘railways’ paper is a quantification of the amount of money saved by agriculture. We are going to try to calculate the savings as a share of Gross National Product in the years 1850-1870. Some previous studies (e.g. Hawke, 1970) conclude that the savings made by farmers using railways are “insignificant.” Let’s test this!
1. The graph shows the coefficient of the regression of rent against track length. The coefficient provides the rent-per-acre increase for every extra kilometre of track within 40 km. of the estate. The landlord is “extracting” this amount, equal to what the tenant farmer saves by using the railway.
2. If we multiply the coefficient by number of acres by the length of track (year by year), this will give us the total amount saved. For example, take the year 1860. If a landowner had 1,000 acres, and in (say) 1860 200 km of track became available, then he would be able to gain an extra 1000*200*0.0002 = 40 pounds for that year and going on into the future. (I got the 0.0002 from reading off the graph). But the point is that this saving is cumulative. We could (and we will!) go back to 1850, find the savings and then add that to the saving for 1851, and so on. The landowner gets the cumulative savings year after year.
3. At this point, we don’t care whether it was the landowner or the tenant who got the money. It was saved, that’s enough.
4. The result from paragraph 2 gives us the savings for our estates – now we need to extend this to the whole country.
5. This isn’t too hard: Malcolm and I can calculate total track year by year, and Amy and I can find (where?!) total amount of pastoral land and cattle.
6. The next step is to divide the total savings by the yearly GNP.
7. Trying to get this done by the end of February!