Prices in the past

In my local history research, when I’m quoting a monetary value from the past I also give the equivalent in modern terms, using the Bank of England inflation calculator. This helps understanding to some extent, but leads to things like the modern-equivalent annual rent for a shop plus living accommodation being given as £5,846 (£50 in 1870), which feels absurdly low.

Then I saw an essay going around at the moment, “How do we know the history of extreme poverty”? from the Our World In Data project, which is not only very interesting but also includes data on historical per-capita GDP in England (adjusted for inflation and including non-market production such as households growing their own food).

This made me wonder if I should move to using per-capita-GDP-adjusted inflation-adjusted prices instead of just inflation-adjusted prices. Using the example above, the annual shophouse rent quoted would map to £42,666 (per-capita GDP was £4,149 in 1870 and £30,281 in 2016, so £5,846 in 1870 is equivalent to £5846*£30281/£4149 today), which feels rather more realistic.

Obviously I can’t be the first historian to think of this, but I haven’t managed to find any discussion or guidelines on it, partly because my Google searches keep filling up with economics and accounting instead.

Does anyone have any thoughts on this, or can see an error in my reasoning, or can point me at existing guidelines? (No need to point out rounding errors in the maths — I’ve simplified for clarity.) (Also, for those who don’t know, I have no formal historical training whatsoever. I intend to do something about this at some point.)