Standard of Living and its factors - ESSAY

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Mahmed Najem
Standard of living and its factors. - ESSAY
Standard of living refers to the level of wealth, comfort, material goods and
necessities available to a certain economic class in a certain geographic area. The
standard of living includes factors such as 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, inflation rate,
affordable access to quality healthcare, quality and availability of education, life
expectancy, incidence of disease, cost of goods and services, infrastructure, national
economic growth, economic and political and stability, political and religious freedom,
environmental quality, climate and safety. However the way in which this is measured
is a controversial subject. In this article I will be examining the standard of living of 11
countries while assessing the each of the methods I will use. These countries will be:
New Zealand
Czech Republic
Russian Federation
Firstly, the standard of living is usually measured using National Income statistics, many
are quick to assume that the best way to measure standard of living will be using the
gross domestic product (GDP) of a particular nation to determine whether or not the
standard of living there is `high' or `low'. However, as a measure of the standard of living
in a country, GDP has its limitations and weaknesses. It does not differentiate between
economic output that actually benefits the population and negatives in an economy in a
country, such as, for example, expenses for warfare, pollution-producing industries, etc.
Also, the black economy is a relatively an important factor in any economy and GDP fails
to report activities such as illegal trading or black-market labour. It does not reflect
non-market activities such as unpaid housework, childcare, and care for the elderly at
home, community services or similar activities. The distribution of wealth within a country
can be very uneven. When there is a high concentration of enormous wealth in a very

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Mahmed Najem
small group, and the vast majority of a population is very poor, the average income may
be relatively high, although the standard of living of the majority population is low but
GDP will fail to capture this and this can be seen with countries such as Saudi Arabia
where the vast majority is suffering from poverty but this is lost through measuring GDP.…read more

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Mahmed Najem
According to figure 1, the USA surely has the `best' standard of living, while Tanzania has
the `worst' standards of living. This feasibly provides a reasonable scope to `easily'
examine the economic wellbeing and financial health of the citizens of each of those
countries however it doesn't go into enough detail to take in to account multiple factors
that the term `standard of living' should include.…read more

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Mahmed Najem
As seen in figure 2, the graph has almost been inverted showing that according to this
method, the more educated the people, the lower their standard of living is. However it
could be argued that education is just one of many factors that contributes to standard of
living and cannot be looked at independently as it does not show anything at all.…read more

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Mahmed Najem
We can see that figure 3 backs up the national income statistics and supports the fact
that the higher the national income, the more healthy people are. This shows that there
is a direct correlation between the two.…read more

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Mahmed Najem
To conclude, I think that it is important to use many different indexes when comparing
living standard whether that be over time locally or over different countries. I think it's
also important to bear in mind that each of these indexes can portray the accurate living
standards for a particular country. For example a consumption index may me accurate for
USA while being not so accurate for UK or vice versa.…read more


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