Risk, Asset Markets and Inequality: Evidence from Medieval England

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Risk, Asset Markets and Inequality: Evidence from Medieval England

By Cliff T. Bekar and Clyde Reed

Oxford Economic and Social History Working Papers, No.79 (2009)

Abstract: Between the eleventh and fourteenth centuries English peasants faced large income shocks relative to mean incomes. Innovations in property rights over land induced peasants to respond by trading small parcels of land as part of their risk coping strategy. The same period witnessed a dramatic increase in inequality in the distribution of peasant landholdings. We argue that these events are related. When agents are able to trade their productive assets to manage risk, wealth dynamics become unstable and generate increasing inequality over time. We analyze the effects of these dynamics in the context of medieval English land markets and peasant landholdings.

Introduction: During the 12th and 13th centuries the English peasantry experienced large increases in poverty and inequality. The Domesday survey of 1086 indicates that the vast majority of free peasant households held land sufficient to generate income levels above subsistence by working their own holdings exclusively. In contast the Hundred Rolls survey of 1279-80 indicates that, depending on estimates of the number of landless peasants, only 15 to 30 percent of free peasant households held plots large enough that they could achieve subsistence without supplementing harvest realizations with wage income.

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Sharan Newman