Integration in European coal markets, 1833-1913

by John E. Murray (Rhodes College) and Javier Silvestre (University of Zaragoza, Instituto Agroalimentario de Aragón, and Grupo de Estudios ‘Población y Sociedad’)

The full article from this blog was published on The Economic History Review and it is available here


The availability of coal is central to debates about the causes of the Industrial Revolution and modern economic growth in Europe.  To overcome regional limitations in supply,  it has been argued that coal could have been transported. However, despite references to the import option and transport costs, the evolution of coal markets in nineteenth-century Europe has received limited attention.  Interest in the extent of markets is motivated  by their effects on economic growth and welfare ( Federico 2019;  Lampe and Sharp 2019).

The literature on market integration in nineteenth-century Europe mostly refers to grain prices, usually wheat. Our paper extends the research to coal, a key commodity. The historical literature of coal market integration is scant—in contrast to the literature for more recent times (Wårell 2006; Li et al. 2010; Papież and Śmiech 2015). Previous historical studies usually report some price differences between- and within countries, while a  few provide statistical analyses, often  applied to a narrow geographical scope.

We examine intra- and international market integration in the principal coal producing countries, Britain, Germany, France and Belgium.  Our analysis includes three, largely  non-producing, Southern European countries, Italy, Spain and Portugal—for which necessary data are available. (Other countries were considered but ultimately not included). We have created a database of (annual) European coal prices at different spatial levels.

Based on our price data,  we consider prices in the main consumer cities and producing regions and estimate specific price differentials between areas in which the coal trade was well established. As a robustness check, we estimate trends in the coefficient of variation for a large number of markets. For the international market, we estimate price differentials between proven trading markets. Given available data,  focus on Europe’ main exporter, Britain, and the main import countries –  France, Germany, and Southern Europe. To confirm findings, we estimate the coefficient of variation of prices throughout coal producing Europe.

Picture 1
Figure 1. Coalmine in the Borinage, 1879, by Vincent van Gogh.Available at <;

To estimate market integration within coal producing countries, we utilise Federico’s (2012) proposal for testing both price convergence and efficiency—the latter referring to a quick return to equilibrium after a shock. For the international market, we again estimate convergence equations. For selected international routes, and according to the available information, we complete the analysis with an econometric model on the determinants of integration—which includes the ‘second wave’ of research in market integration (Federico 2019). Finally, to verify our findings, we apply a variance analysis to prices for the producing countries.
Our results, based on quantitative and qualitative evidence, may be summarized as follows. First, within coal-producing countries, we find evidence of price convergence. Second, markets became more ‘efficient’ over time – suggesting reductions in information costs. Nevertheless, coal prices were subject to strong fluctuations and shocks, in relation to ‘coal famines’. Compared to agricultural produce, the process of integration in coal appears to have taken longer. However, price convergence in coal tended to stabilize at the end of our period, suggesting insignificant further reduction in transports costs and the existence of product heterogeneity. Finally, our evidence indicates that cartelization in Continental Europe from the late nineteenth century had limited impact on price convergence.

Turning to the international coal market, our econometric results confirm price convergence between Britain and importing countries. Like domestic markets, the speed with which price differentials between Britain and Continental Europe were eroded declined from the 1900s. Further, market integration between Britain and Continental Europe appears to have been largely influenced by changes in transportation costs, information costs and protectionism. Extending our analysis to other countries, (with, admittedly, limited data) suggests that price convergence started later in our period. Finally, our results indicate the limited ability of cartels to restrict competition beyond their most immediate area of influence.
Overall, we observe integration in both the domestic and international coal market. Future research might consider expanding the focus to other cross-country, Continental, markets to acquire a deeper comprehension of the causes and effects of market integration.

To contact the authors:

Javier Silvestre,


Federico, G., ‘How much do we know about market integration in Europe?’, Economic History Review, 65 (2012), pp. 470-97.

Federico, G., ‘Market integration’, in C. Diebolt, and M. Haupert, editors, Handbook of Cliometrics (Berlin, 2019).

Lampe, M. and Sharp, P., ‘Cliometric approaches to international trade’, in C. Diebolt, and M. Haupert, editors, Handbook of Cliometrics (Berlin, 2019).

Li, R., Joyeux, R., and Ripple, R. D., ‘International steam coal market integration’, The Energy Journal 31 (2010), pp. 181-202.

Papież, M. and Śmiech, S., ‘Dynamic steam coal market integration: Evidence from rolling cointegration analysis’, Energy Economics 51 (2015), pp. 510-20.

Wårell, L., ‘Market integration in the international coal industry: A cointegration approach’, The Energy Journal 27 (2006), pp. 99-118.

EFFECTS OF COAL-BASED AIR POLLUTION ON MORTALITY RATES: New evidence from nineteenth century Britain

Samuel Griffiths (1873) The Black Country in the 1870s. In Griffiths’ Guide to the iron trade of Great Britain.

Industrialised cities in mid-nineteenth century Britain probably suffered from similar levels of air pollution as urban centres in China and India do today. What’s more, the damage to health caused by the burning of coal was very high, reducing life expectancy by more than 5% in the most polluted cities like Manchester, Sheffield and Birmingham. It was also responsible for a significant proportion of the higher mortality rates in British cities compared with rural parts of the country.

 These are among the findings of new research by Brian Beach (College of William & Mary) and Walker Hanlon (NYU Stern School of Business), which is published in the Economic Journal. Their study shows the potential value of history for providing insights into the long-run consequences of air pollution.

From Beijing to Delhi and Mexico City to Jakarta, cities across the world struggle with high levels of air pollution. To what extent does severe air pollution affect health and broader economic development for these cities? While future academics will almost surely debate this question, assessing the long-run consequences of air pollution for modern cities will not be possible for decades.

But severe air pollution is not a new phenomenon; Britain’s industrial cities of the nineteenth century, for example, also faced very high levels of air pollution. Because of this, researchers argue that history has the potential to provide valuable insights into the long-run consequences of air pollution.

One challenge in studying historical air pollution is that direct pollution measures are largely unavailable before the mid-twentieth century. This study shows how historical pollution levels in England and Wales can be inferred by combining data on the industrial composition of employment in local areas in 1851 with information on the amount of coal used per worker in each industry.

This makes it possible to estimate the amount of coal used in over 581 districts covering all of England and Wales. Because coal was by far the most important pollutant in Britain in the nineteenth century (as well as much of the twentieth century), this provides a way of approximating local industrial pollution emission levels.

The results are consistent with what historical sources suggest: the researchers find high levels of coal use in a broad swath of towns stretching from Lancashire and the West Riding down into Staffordshire, as well as in the areas around Newcastle, Cardiff and Birmingham.

By comparing measures of local coal-based pollution to mortality data, the study shows that air pollution was a major contributor to mortality in Britain in the mid-nineteenth century. In the most polluted locations – places like Manchester, Sheffield and Birmingham – the results show that air pollution resulting from industrial coal use reduced life expectancy by more than 5%.

One potential concern is that locations with more industrial coal use could have had higher mortality rates for other reasons. For example, people living in these industrial areas could have been poorer, infectious disease may have been more common or jobs may have been more dangerous.

The researchers deal with this concern by looking at how coal use in some parts of the country affected mortality in other areas that were, given the predominant wind direction, typically downwind. They show that locations which were just downwind of major coal-using areas had higher mortality rates than otherwise similar locations which were just upwind of these areas.

These results help to explain why cities in the nineteenth century were much less healthy than more rural areas – the so-called urban mortality penalty. Most existing work argues that the high mortality rates observed in British cities in the nineteenth century were due to the impact of infectious diseases, bad water and unclean food.

The new results show that in fact about one third of the higher mortality rate in cities in the nineteenth century was due to exposure to high levels of air pollution due to the burning of coal by industry.

In addition to assessing the effects of coal use on mortality, the researchers use these effects to back out very rough estimates of historical particulate pollution levels. Their estimates indicate that by the mid-nineteenth century, industrialised cities in Britain were probably as polluted as industrial cities in places like China and India are today.

These findings shed new light on the impact of air pollution in nineteenth century Britain and lay the groundwork for further research analysing the long-run effects of air pollution in cities.


To contact the authors:  Brian Beach (; Walker Hanlon (