Estimates of national income and its components have been used by economists and economic historians to increase our knowledge of economic and social change in Europe since the industrial revolution. Yet national income analysis may not be the best method of examining all facets of that change. In particular, the measurement of real income per capita is a restricted measure of welfare; it largely ignores the environment within which life is lived, the health of the population and the length of their lives. What can be done to take account of these factors?

In a recent Discussion Paper, Programme Director Roderick Floud first surveys the attempts which have been made, principally by Dan Usher and Jeffrey Williamson, to adjust measures of national income by making imputations for such factors as changing mortality. Since life expectancy has risen very rapidly both in the developed and the developing world, such imputations make a large difference to measured rates of economic growth. Floud argues, however, that these imputations considerably understate the adjustments which should be made to take account, for example, of better health within a given length of life. Moreover, adjustments to national income can tell us little about changes in the welfare of particular regions, although it is obvious that economic growth has not been constant across regions within countries.

By contrast, Floud argues the measurement of changes in human heights offers a sensitive indicator of changes in welfare, both for national populations and for sub-groups of those populations. Height is a measure of net nutritional status, and it reflects the balance between food intake and the demands made on the body by growth, work effort, disease and other factors. Floud shows that there have been very substantial changes in the heights of European populations. He demonstrates the close connection between such changes and the more conventional measures, such as life expectancy and the level of infant mortality. Moreover, the very large variation in average height across social classes that can be observed in some historical data reflects the inequality in past societies.


Measuring the Transformation of the European Economies: Income, Health and Welfare
Roderick Floud

Discussion Paper No. 33, November 1984 (HR)