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What Are the Different Ways to Measure Standard of Living?

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  • Written By: Mary McMahon
  • Edited By: Shereen Skola
  • Last Modified Date: 10 September 2018
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    Conjecture Corporation
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A variety of tools, including economic and social assessments, can be used to measure standard of living. Some advocates argue that a mixture of methods is the most appropriate to provide a balanced view. Others believe it is possible to use single measures to accurately encompass standard of living. This is an important and sometimes touchy subject, as assessments of standard of living are used in activities like making grants and creating development programs.

A popular method to measure standard of living among economists is to use the gross domestic product (GDP) per capita, adjusted for inflation. This looks at the total value of goods and services produced. High GDP is believed to be indicative of high standard of living because it means countries are making lots of goods and services. It has some flaws, however, as it does not account for things like unpaid work. If most women in a society are expected to stay at home caring for children and elders, for example, this might not be reflected in the GDP.

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In addition to economic measures like GDP, it’s also possible to consider things like the cost of living index and inflation. These can provide clues into the nation’s economic well being. This, in turn, can offer information about living conditions. Surveys can also explore how many people own homes or common appliances like refrigerators and stoves to measure standard of living. If only 30% of a nation’s residents had access to refrigeration, for instance, this might suggest a low standard of living.

Social factors like life expectancy, average education, and class mobility can also be used to measure standard of living. Researchers can also explore topics like the incidence of vaccine-preventable disease, quality of health care, and gender or race equality in professional fields. In a nation where people of color rarely work their way into high-ranking executive positions, for example, researchers may argue that racial inequality has a negative impact on standard of living.

Tools like the human development index (HDI), which was developed by the United Nations, consider both economic and social factors to measure standard of living. The HDI examines average life expectancy at birth, adjusted GDP, and average educational attainment. High scores in all areas suggest a generally healthy, productive society with many opportunities for residents, which indicates a good standard of living. Scores can also be compared against each other to evaluate how well countries perform, and whether they are improving with time.

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