Measuring National Income Growth Democratically: Methods and Estimates for the United Kingdom

Measures of aggregate real income and average real income per head are some of the best-known and frequently cited statistics around the world; but they are a poor measure of human progress, even in terms of income. By construction they 'weight' households by their share in total income, rather than their share in the population. We show how a democratic measure of real national disposable income growth can be produced. Our measure allocates the whole of national income, as shown in the national accounts, to a sample of individual households. We also use a democratic deflator rather than a plutocratic price index to derive our measure of real income. To make this possible, we present new methods to reconcile discrepancies between survey data and the national accounts. The data we produce for the UK show declining inequality over the period 2006 to 2017 and, consistent with that, we find that the growth rate of real democratic national income per household (after adjusting for household size) grew by 0.1 per cent more than the real plutocratic income per household over the period in question.