Willingness to Pay: Slave Prices in the 18th Century Cape Colony

Literature › Works

Sophia du Plessis; Ada Jansen; Dieter von Fintel (2010). Willingness to Pay: Slave Prices in the 18th Century Cape Colony. Future Research in Economic and Social History Meetings, STIAS, Stellenbosch, 24 November 2010. Department of Economics, Stellenbosch University.

Type	conference paper
Scope	Comparative and methods
Method	econometric
Period studied	1658–1773 (price data 1658-1768; mostly post-1700)
Regions	Cape Colony, Cape Town, Stellenbosch, Drakenstein, Hottentots Holland
Themes	origins segregation, agriculture land, labour markets wages, methods data sources, comparative theory
Citation key	plessis2010

Argument

The slides ask whether slavery at the Cape was economically viable or 'dead money'. They test whether slave prices matched the value of slaves' marginal product, using a hedonic price model of slave sales alongside a Tobit model of wine production. Controlled prices track one year of wine marginal productivity, plus general inflation, plus characteristics that promise lifetime returns. The authors note, as a prompt for further work, that a slave's annual living cost was close to what the slave produced, so paying up front for expected lifetime returns may not have been profitable.

Evidence and method

Robert Shell's 'Changing Hands' slave transfer sale deeds (1658-1768); Du Plessis & Du Plessis (2009) general price levels from 1700; Hans Heese's opgaafrollen (1663-1773) for farm productivity; auction rolls for product prices; Worden (1985) for population composition. 646 observations are used in the hedonic regression.

Findings

• Governor de Chavonnes in 1717 argued that slavery would inhibit economic development. (p. 3)

  the money spent on slavery is dead money

• Slaves were a major share of farmers' capital investment in the period 1731-80. (p. 4)

  Guelke (1974) estimates 13-17% of value of total estates of arable farmers in the period 1731-80

• The slave share of farmers' estates rose in the late 18th century. (p. 4)

  Increase to about 20% in last two decades of century

• Slave numbers and arable output were closely correlated in the early 18th century. (p. 13)

  correlation between the number of adult male slaves owned and the output of arable farms

• Slave dependence on farms weakened after the 1740s as other labour, especially Khoi, was used more. (p. 13)

  This changes after 1740’s with increasing use of other labour, especially Khoi

• Slave sellers' location was an important price determinant, indicating resale close to Cape Town. (p. 19)

  Seller location of great importance – evidence of resale close to CTN

• Cape slaves were valued for skills rather than reproductive capacity (Shell 2009, cited). (p. 7)

  slaves in the Cape Colony were valued for their skills and not the ability to reproduce

• Core result: prices reflect one year of productivity plus lifetime-return characteristics. (p. 24)

  Buyers paid for one year of productivity and expected returns to characteristics over slaves’ lifetime

• Annual living cost was roughly equal to slave productivity, which casts doubt on profitability. (p. 24)

  Annual living cost of a slave was about 16 rixdollar