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Rule Britannia! British Stock Market Returns, 1825-1870

Published online by Cambridge University Press:  01 December 2009

Graeme G. Acheson*
Affiliation:
Lecturer in Finance, School of Business, Retail and Financial Services, University of Ulster, Coleraine BT52 1SA, N. Ireland. E-mail: g.acheson@ulster.ac.uk.
Charles R. Hickson*
Affiliation:
Senior Lecturer in Finance, Queen's University Management School, Queen's University Belfast, Belfast BT7 1NN, N. Ireland. E-mail: c.hickson@qub.ac.uk.
John D. Turner*
Affiliation:
Professor in Finance, Queen's University Management School, Queen's University Belfast, Belfast BT7 1NN, N. Ireland. E-mail: j.turner@qub.ac.uk.
Qing Ye*
Affiliation:
Lecturer in Finance, Queen's University Management School, Queen's University Belfast, Belfast BT7 1NN, N. Ireland. E-mail: q.ye@qub.ac.uk.

Abstract

This article presents a new series of monthly equity returns for the British stock market for the period 1825-1870. In addition to calculating capital appreciation and dividend yields, the article also estimates the effect of survivorship bias on returns. Three notable findings emerge from this study. First, stock market returns in the 1825-1870 period are broadly similar for Britain and the United States, although the British market is less risky. Second, real returns in the 1825-1870 period are higher than in subsequent epochs of British history. Third, unlike the modern era, dividends are the most important component of returns.

Type
ARTICLES
Copyright
Copyright © The Economic History Association 2009

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