Presented by: Martin Weale, ESCoE and King’s College London
with Andrew Aitken, ESCoE and NIESR
National Institute of Economic and Social Research, 2 Dean Trench Street, Smith Square, London SW1P 3HE
Measures of growth in average income per head of population or per household are, in essence, plutocratic measures of economic growth. Growth in the income of a high-earning household has more impact on growth in the total per household than does growth in the income of a low-earning household. In this ESCoE Research Seminar Professor Martin Weale discusses recent work, co-authored with Andrew Aitken (ESCoE and NIESR), to develop a democratic indicator of income growth, weighting each household’s growth experience equally. A welfare interpretation of the democratic indicator of income growth is provided. Application to United Kingdom household data suggests that, over the interval 2005/6-2015/6 democratic real equivalised household income grew by 0.20 per cent per annum while the plutocratic equivalent grew by 0.52 per cent per annum.
Martin Weale is Professor of Economics at King’s College, London. He is a researcher at ESCoE and affiliated to the Centre for Macroeconomics at the London School of Economics and is a member of the ONS Panel of Economic Experts and the ONS Technical Panel on Prices. He was also a member of the advisory panel set up for the Johnson Review. He was for six years (to August 2016) an External Member of the Monetary Policy Committee and before that he was Director of the National Institute of Economic and Social Research for fifteen years. He has a long-standing interest in economic statistics and is the author of many journal articles on the topic. He was appointed CBE for services to economics after completing his work for the Turnbull-King Review of Average Earnings.