The economist Jonathan Haskel has won the inaugural Indigo Prize for economics after designing a better way to measure national wealth than the existing Gross Domestic Product figure.

Mr Haskel, who is professor of economics at Imperial College Business School, was awarded the £125,000 first prize jointly with Diane Coyle, professor of economics at the University of Manchester.

Entrants were asked to come up with a new method for calculating GDP that included social well-being and national levels of creativity and entrepreneurship.

In his winning submission, Prof Haskel suggested the use of online experiments exploring people’s willingness to pay for free goods, and a factoring of environmental capital into GDP figures.

He said: I’m delighted to share the prize with fellow researchers. We don’t want to junk GDP: rather, to improve it by building on its strengths and extend it to measure new and different areas of the economy, like free goods and intangible assets.” 

Mr Haskel, who lives in north west London, is the son of Lord Haskel, the Labour peer. His new book, Capitalism without Capital: the Rise of the Intangible Economy, is published next month.

The judging panel included former minister Lord  O’Neill, entrepreneur Brent Hooberman, Lord O’Donnell, the former Cabinet Secretary and Stephanie Flanders, the BBC’s former economics editor.