This project will make a wider range of welfare measures, beyond GDP, available to policy makers.
Lead: Martin Weale (King’s)
Co-Leads: Nick Oulton (LSE, NIESR)
Expected end date: Q2 2018/2019
Objectives: The ONS acknowledges that GDP is flawed as a measure of societal welfare and it therefore wishes to make a wider range of measures available to policy-makers. One of the limits of GDP-related indicators of welfare (such as real national disposable income) is that they in effect weight together the welfare of individual households on the basis of their relative incomes or consumption. A recognition that this is less than satisfactory has prompted the ONS to give more focus to the distribution of income. This project will investigate alternative aggregate indicators of welfare which are not subject to the criticism that they are, in effect, weighted by income or expenditure.
The first issue to be addressed is production of quarterly estimates of median household income and the development of a nowcasting model which can be used to produce timely estimates. The next tasks will be to develop equal-weighted measures of income growth, explore the issues raised by deflation and investigate how sensitive the answers are to the choice of deflator.
Project code: 1.3