What is a 'Standard of Living'

A standard of living is the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class or a certain geographic area. The standard of living includes factors such as income, gross domestic product (GDP), national economic growth, economic and political stability, political and religious freedom, environmental quality, climate and safety. The standard of living is closely related to quality of life.

BREAKING DOWN 'Standard of Living'

The standard of living is often used to compare geographic areas, such as the standard of living in the United States versus Canada, or the standard of living in St. Louis versus New York. The standard of living can also be used to compare distinct points in time. For example, compared with a century ago, the standard of living in the United States has improved greatly. The same amount of work buys an increased quantity of goods, and items that were once luxuries, such as refrigerators and automobiles, are now widely available. Also, life expectancy has increased, and annual hours worked have decreased.

An Example of a Living Standard Measure

One measure of standard of living is the United Nations' Human Development Index (HDI), which scores 188 countries based on factors including life expectancy at birth, education and income per capita. As of December 2015, the countries with the five highest HDI scores are Norway (0.944), Australia (0.935), Switzerland (0.930), Denmark (0.923) and the Netherlands (0.922). Conversely, the countries with the five lowest 2015 HDI scores are Niger (0.348), Central African Republic (0.350), Eritrea (0.391), Chad (0.392) and Burundi (0.400), although Syria and Libya experienced the most dramatic decreases in living standard.

To exemplify the difference between the scores of 0.944 and 0.348, Norway has a life expectancy at birth of 81.6 years, 17.5 expected years of schooling (per citizen), gross national income (GNI) per capita of $64,922.30 (PPP-adjusted currency units), a homicide rate (per 100,000 people) of 2.2, a mobile phone subscription rate (per 100 people) of 116.5 and an internet usage rate of 96.3% of its population. Niger, meanwhile, has a life expectancy at birth of 61.4 years, 5.4 expected years of schooling, a GNI per capita of $908.30, a homicide rate of 4.7, a mobile phone subscription rate of 44.4 and an internet usage rate of 2%. The U.S. scored eighth on the list with a combined score of 0.915, a life expectancy at birth of 79.1 years, 16.5 expected years of schooling and GNI per capita of $52,946.50.

Standard of Living vs. Quality of Life

The terms standard of living and quality of life are often believed to mean the same. While they may overlap, there is a difference between the two. A standard of living generally refers to wealth, comfort, material goods and the necessities of certain classes in certain areas — or more objective characteristics, whereas a quality of life is more subjective and intangible. Characteristics that make up a good quality of life for one person may not necessarily be the same for someone else.

Some of the things that can lead to a higher quality of life are often things that many people take for granted in developed countries like the United States. These include (but are not limited to): 

  • freedom from slavery
  • equal protection under the law
  • the right to marry and the right to have a family
  • the right to privacy 
  • the right to be treated equally without consideration of gender, race, language, religion, etc. 
  • freedom of religion 
  • the right to work and the right to education 
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