This article reviews Britain’s experience of economic growth in the twentieth
century. It argues that average living standards have risen much more rapidly than
is generally appreciated. The main reasons for this include increased life
expectancy which is highly valued by the public and downward bias in
conventional estimates introduced by traditional price deflators which do not
measure the true cost of living. The main policy implication of this analysis is the
need to think about the value of outcomes if appropriate public expenditure
policies are to be implemented.