Analysing Data Issues in Measuring Inequality in UK Regions

Julian Gough

World Economics, 2020, vol. 21, issue 4, 51-88

Abstract: Converting official nominal regional GDP data for 2017 to real values, using an approximate deflator for regional price levels, reduced the size of the London economy by 12% or £51 billion. Using real GDP per head as an indicator of prosperity revealed London to be the most prosperous region and Wales the poorest. Real data reduced the inequality between regions by 26% compared to the nominal data. Using real household income per head as an alternative indicator showed London to be the most prosperous region and the North East of England to be the poorest. Real data reduced the inequality between regions by 16% compared to the nominal data. Using the regional unemployment rate as a proxy inverse measure of prosperity produced markedly different results to the financial data. London had high prosperity in financial terms co-existing with a comparatively high unemployment rate. A composite index of prosperity, combining all three indicators with selected weights, revealed London to be the most prosperous region at 33% above the national average and the North East of England to be the poorest at 23% below the national average.

Date: 2020
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