CONSUMPTION IN CANADA DAVIDSON. 31 



price warranted if the community was to continue to spend the 

 same money per head in 1895 as in 1880. Tea, however has not 

 increased so much as the price has declined. The consumption 

 is 48 per cent, greater than in 1880, hut the 1895 price is 35 per 

 cent, lower than the 1880 price. To preserve the same expendi- 

 ture of income on this article the consumption should have risen 

 54 per cent,, or 6 per cent, more than it has risen. 



From this comparison of consumption and prices it is evident 

 that there has been not only an increase of well-being due to the 

 larger quantity of these commodities used, but an increase of 

 consumption power as well, and judging from the instances 

 before us, an increase of consumption power of considerable 

 extent. We can carry the investigation a little further, to find 

 out, so far as figures can tell us, how far the well-beino- of the 



O 



community has increased. The most obvious method of esti- 

 mating this increase is by constructing an index number for 

 consumption. Into the problem whether a permanent index 

 number of consumption is possible, it is not necessary to enter; 

 the following attempt is intended only as a method of illustra- 

 tion, not as an indication of cause. It is the more important to 

 state this limitation, as the year 1880 was, as the table shews, a 

 year of very low consumption a fact which was not apparent to 

 the writer till this calculation, the last made for this paper, was 

 made. So long as the result is not used by politicians for 

 partisan purposes, and is regarded merely as a summary of the 

 earlier table, it does not matter much which year is taken. 



The method of construction was to take the seven articles 

 tea, coffee, sugar, dried fruits, spirits, beer and tobacco as typical 

 of the consumption power of the community, and to take the 

 quantity consumed per head in 1880 in each case as equal to 100 

 the sum 700 being taken as the index number of the consump- 

 tion of that year. The articles are, of course, not all equally 

 important, and therefore it must be repeated that the index 

 number is intended for purposes of illustration only : 



