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Deflation of Distributional National Accounts

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  • Martin Weale
  • Andrew Aitken

Abstract

In this note we discuss suitable deflators for distributional national accounts. Measures such as the top 10 per cent income share, or the 90/10 income ratio do not require deflation. Other measures such as the income or income growth of particular percentiles of the income distribution do require deflation. We argue that democratic deflators are generally more appropriate than plutocratic deflators, and the ONS now produces democratic price indices for equivalised income quintiles and deciles, in addition to the aggregate democratic CPIH.

Suggested Citation

  • Martin Weale & Andrew Aitken, 2021. "Deflation of Distributional National Accounts," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2021-01, Economic Statistics Centre of Excellence (ESCoE).
    • Handle: RePEc:nsr:escoed:escoe-dp-2021-01
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    References listed on IDEAS

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    1. Layard, R. & Mayraz, G. & Nickell, S., 2008. "The marginal utility of income," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1846-1857, August.
    2. Peter ven de Ven & Anne Harrison & Barbara Fraumeni & Dale W. Jorgenson & Paul Schreyer, 2017. "Measuring Individual Economic Well-Being and Social Welfare within the Framework of the System of National Accounts," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 460-477, December.
    3. Andrew Aitken & Martin Weale, 2020. "A Democratic Measure of Household Income Growth: Theory and Application to the United Kingdom," Economica, London School of Economics and Political Science, vol. 87(347), pages 589-610, July.
    4. Jorrit Zwijnenburg & Sophie Bournot & Federico Giovannelli, 2017. "Expert Group on Disparities in a National Accounts Framework: Results from the 2015 Exercise," OECD Statistics Working Papers 2016/10, OECD Publishing.
    5. Maryse Fesseau & Maria Liviana Mattonetti, 2013. "Distributional Measures Across Household Groups in a National Accounts Framework: Results from an Experimental Cross-country Exercise on Household Income, Consumption and Saving," OECD Statistics Working Papers 2013/4, OECD Publishing.
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    More about this item

    Keywords

    deflation; distributional national accounts;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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