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Economic wellbeing Glenn Everett, Head of Measuring National Wellbeing ONS Economic Forum 7 April 2014 1
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Page 1: Economic forum wellbeing

Economic wellbeing

Glenn Everett, Head of Measuring National Wellbeing

ONS Economic Forum

7 April 2014

1

Page 2: Economic forum wellbeing

Economic Well-being: Background

• GDP inevitably and correctly plays a central role in monetary and fiscal policy

• Traditional measures of progress such as GDP are increasingly considered an incomplete picture of overall economic well-being

• Additional economic, social and environmental measures are needed alongside GDP to provide a complete picture of how society is doing

• UK’s Measuring National Well-being (MNW) Programme was launched in November 2010

Page 3: Economic forum wellbeing

Measuring National Well-being: what are we trying to achieve?

Social Environment

The ‘triple bottom line’

Economy

An accepted and trusted set of National Statistics to help people understand and monitor national well-being.

Page 4: Economic forum wellbeing

Limitations of GDP

• GDP has known weaknesses as a measure of economic welfare or well-being

• GDP does not consider:Changes in populationDepreciation of assetsDistribution of incomeNational and household wealthNon-market activities

Page 5: Economic forum wellbeing

Proposed additional measures

Economy wide• Gross Domestic Product (GDP) per capita• Net Domestic Product (NDP) per capita• Real Net National Disposable Income (RNNDI) per capita• Real Net Financial and Physical Assets

Households• Real Adjusted Household Disposable Income (RAHDI) per

capita• Real Median Household Income • Real Household Net Financial and Physical Assets

Page 6: Economic forum wellbeing

UK GDP and GDP per capita (1997 = 100)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201380

90

100

110

120

130

140GDP

GDP per Capita

Page 7: Economic forum wellbeing

UK NDP and GDP per capita (2010 prices)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201210,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

GDP per capita

NDP per capita

£

Page 8: Economic forum wellbeing

 UK Real Net National Disposable Income and GDP per capita (2010 prices)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 201210,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

GDP per capita

RNNDI Per capita

£

Page 9: Economic forum wellbeing

UK net financial and produced assets (2010 prices)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

1000

2000

3000

4000

5000

6000

7000

8000

£ Billions

Page 10: Economic forum wellbeing

UK Real adjusted household disposable income and GDP per capita

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

RAHDI per capita

GDP per capita

£

Page 11: Economic forum wellbeing

UK median household income, average household disposable income and GDP per head

19971998

19992000

20012002

20032004

20052006

20072008

20092010

201180

90

100

110

120

130

140

GDP per capitaMedian incomeRHDI per capita

1997 = 100

Page 12: Economic forum wellbeing

Real Household Wealth (2010 prices)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Residential wealth Other non-financial assets Net financial assets£ Billions

Page 13: Economic forum wellbeing

Key Findings

• GDP recovered substantially from the falls in recent years, but GDP per capita has only recovered a little

• Real net national disposable income per capita has continued to fall gently

• Real adjusted household disposable income per capita held up well during the deepest phase of the recession but has been falling gently in the subsequent period

• Median household income and real household income have grown broadly in line with each other in recent years, suggesting no major distributional factors

Page 14: Economic forum wellbeing

Way forward

• Regular publication of additional measures

• Continue to develop and refine additional measures (eg natural capital, human capital)

• Update the ‘dashboard’ accordingly

• Update the Household Satellite Accounts