STANDARD OF LIVING

Standard of living

The level of wealth, comfort, material goods and necessities available to a certain socioeconomic class, in a certain geographic area.

An evaluation of standard of living commonly includes the following factors:

• Income• Quality and availability of

employment• Class disparity• Poverty rate• Quality and affordability of housing • Hours of work required to purchase

necessities• Gross domestic product (GDP) • Inflation rate • Number of paid vacation days per

year• Affordable access to quality health

care

• Quality and availability of education• Life expectancy• Incidence of disease• Cost of goods and services• Infrastructure• National economic growth• Economic and political stability• Political and religious freedom• Environmental quality• Climate• Safety

Ways to measure standard of living

1. Human Development Index2. Gross Domestic Product3. Satisfaction With Life Index4. Happy Planet Index

• The Human Development Index (HDI), developed in 1990 by the United Nations. The origins of the HDI are found in the annual Development Reports of the United Nations Development Programme (UNDP).

• In its 2010 Human Development Report, the UNDP began using a new method of calculating the HDI. The following three indices are used:

1. Life Expectancy Index (LEI) = 2. Education Index (EI) = 2.1 Mean Years of Schooling Index (MYSI) = 2.2 Expected Years of Schooling Index (EYSI) = 3. Income Index (II) =

Finally, the HDI is the geometric mean of the previous three normalized indices:HDI=

LE: Life expectancy at birthMYS: Mean years of schooling (Years that a person 25 years-of-age or older has spent in schools)EYS: Expected years of schooling (Years that a 5-year-old child will spend in schools throughout his life)GNIpc: Gross national income at purchasing power parity per capita

HDI TOP 10 IN 2014

“What people really want is to live long, fulfilling lives, not just to be filthy rich.”

• GDP - the total market value of all the goods and services produced in a country in a year

• GDP is often used as a quick and dirty way to infer a country’s standard of living.

Gross Domestic Product

GDP TOP 10 IN 2010 according to the IMF (GDP given in millions of $):

1. United States (14,624,184)2. China (5,745,133)3. Japan (5,390,897)4. Germany (3,305,898)5. France (2,555,439)6. United Kingdom (2,258,565)7. Italy (2,036,687)8. Brazil (2,023,528)9. Canada (1,563,664)10. Russia (1,476,912)

Satisfaction With Life Index measures happiness directly, by asking people how happy they are with their health, wealth, and education, and assigning a weighting to these answers.

Satisfaction With Life Index top 10 in 2006 :

1. Denmark2. Switzerland3. Austria4. Iceland5. The Bahamas6. Finland7. Sweden8. Bhutan9. Brunei10. Canada

Happy Planet Index is calculated based on life satisfaction, life expectancy, and ecological footprint. It doesn’t measure how happy a country is, but how environmentally efficient it is to support well-being in that country.

Happy Planet Index top 10 in 2009:

1. Costa Rica2. Dominican Republic3. Jamaica4. Guatemala5. Vietnam6. Colombia7. Cuba8. El Salvador9. Brazil10. Honduras

“No wealth makes a human happy, but happiness makes a humman rich ”

Standard Of Living Vs. Quality Of Life

• Quality of life is more subjective and intangible. • Factors that may be used to measure quality of

life include the following: freedom from slavery and torture, equal protection of the law, freedom from discrimination, freedom of thought, freedom of religion, free choice of employment, right to fair pay, right to vote, right to rest and leisure, right to education, right to human dignity…

• Standard of living and quality of life are often referred to in discussions about the economic and social well-being of countries and their residents. The definitions of these terms can be difficult to tease apart and may overlap in some areas.

• The main difference between standard of living and quality of life is that the former is more objective, while the latter is more subjective.

• Standard of living factors such as gross domestic product, poverty rate and environmental quality, can all be measured and defined with numbers, while quality of life factors like equal protection of the law, freedom from discrimination and freedom of religion, are more difficult to measure and are particularly qualitative.

• Both indicators are flawed, but they can help us get a general picture of what life is like in a particular location at a particular time.

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