The study was able to draw on the work on democratic price indices carried out by ONS, who also produced price indices with a treatment of housing consistent with the definition of household income in the Family Resources Survey (FRS). This allowed for the calculation of a democratic measure of household income growth. For the production of a democratic measure of national income growth it was further necessary to attribute public consumption, and the consumption of non-profit institutions serving households, to particular households. We drew on ONS work on education and health consumption and allocated other consumption on the basis of household size. We also had to allocate the income which was not distributed to households, such as retained profits or pension fund investments, which are not distributed to households. Finally, there was an issue that income is generally under-recorded in household surveys. Where there was no further information, we scaled the household data to match the national accounts aggregate. Where possible, however, we drew on other data sources, including the Survey of Personal Incomes and the Wealth and Asset Survey.
By drawing on ONS experience in small area estimation, the research team is exploring the possibility of producing consumption and expenditure data from the Living Cost and Food Survey (LCF) for disaggregated geographies below the regional level. The Annual Population Survey provides an additional source of data on how people perceive their own well-being. By combining these data with the FRS, the LCF and the Understanding Society survey, the research team has a rich data source to develop a composite measure of subjective wellbeing at sub-national level with a focus on mental and physical health, as well as social participation.
