An average of the three might be a safe compromise but it is more common to focus on one.

The output measure is generally regarded as the most reliable indicator of short-term developments (up to a year) whilst for longer periods the expenditure method is preferred.

The income measure is usually the last available, least reliable and rarely used.

The GDP data are widely used by analysts to track the path of the economy, to identify weaknesses in the economy and to assess the likelihood of overheating and thus an increase in inflationary pressures and perhaps a rise in interest rates. They are also helpful for making international comparisons.

Relating the absolute numbers to population, moreover, gives a very crude guide to living standards.

From the table below, which shows the constant price data for real household disposable income (RHDI) back to 1960, it can be shown that during the 1960s, the average annual growth rate was 2.0%, which rose during the 1970s to 2.7%.

In the 1980s, the annual rate edged up again to 2.8% after which it dipped back to 2.7% pa in the 1990s. Since 2000, however, despite the new stability, RHDI growth slipped back to an average of 2.4% pa.

Table 7.12: Real Households Disposable Income