300 Years of Firewood Prices: Uncovering US Economic History | Odd Lots

The Missing Economic Data: Firewood Prices

• 💡 For much of American history, firewood was the dominant energy source, yet comprehensive historical price data was largely absent.
• 🎯 This paper by Nicholas Muller aims to fill that gap, collecting 300 years of firewood prices (1700-2010) to better understand the US economy.
• 🔑 The informal nature of firewood markets and its production in backyards made systematic price tracking difficult.

Data Collection and Methodology

• 📈 Urbanization was a critical factor, creating formal markets for firewood as people moved to cities and lost access to personal woodlots.
• 🪵 Early data (pre-1800s) was sourced from probate and estate records, where firewood was valued as an asset.
• 💻 Later data was extracted using software from digitized newspaper advertisements, providing details on price, species, and seasonality.

Key Findings on Firewood Price Trends

• 📊 1700-1800: Firewood prices showed no significant trend in real terms, fluctuating with inflation.
• 📈 1800-Civil War: Prices increased in real terms by 0.5% to 1% annually, indicating growing demand and potential scarcity near cities.
• ⚠️ Post-Civil War to late 20th Century: Little systematic price change until the 1970s energy crisis, which saw a resurgence in firewood use and real price increases.

Factors Driving Price Changes and Energy Transitions

• ⚡ Demand grew due to population increase and manufacturing (e.g., charcoal for iron production).
• 🏘️ Scarcity of wood closer to cities increased transportation costs, contributing to price hikes.
• 🚂 Railroads, while potentially lowering costs, also became voracious consumers of wood themselves until they transitioned to coal.
• 🌲 The energy content of different wood species (e.g., hickory vs. pine) and seasoning affected prices, with discounts for wood marketed in summer.

Broader Economic and Environmental Implications

• 📉 The research highlights how energy transitions often occur during periods of social upheaval (e.g., financial crises, wars).
• 🌳 It underscores the importance of natural capital (like forests) as a contributor to economic growth, often overlooked in traditional GDP measures.
• 🏡 The study also touches upon the challenges of valuing the informal economy and home production, pushing for broader measures of social welfare beyond market GDP.
• 💡 Digitization and AI have enabled new forms of historical economic research, making data collection more efficient than ever before.