Standard of Living

STANDARD OF LIVING refers to the overall or aggregate wealth of an individual or a representative member of a larger community. Initially viewed in purely monetary terms, the concept is now considered to be more appropriately treated in broader terms, including subjective measures of well-being and opportunity. Nobel Prize-winning economist Amartya Sen has referred to capabilities as a measure of living standards. This term has the virtue of including the concept of access to opportunity, that is, a measure of economic equality embedded within. Low standards of living are identified as representing a relative level of poverty within countries, and the inability to survive on the current standard of living represents absolute poverty. Government policies, in democratic societies at least, are generally aimed at increasing the overall standard of living of society, although perhaps by privileging certain sections of that society.

In poor societies, a standard of living refers to possession of basic necessities, particularly food and personal security. As economic conditions improve, people become able to exercise taste and discrimination in selecting a combination of goods and services that they can obtain to define their own living standard. The American psychologist Abraham Maslow wrote that people have a hierarchy of needs that are to be satisfied in order, from the very basic physical security needs at the bottom, up through various levels of ownership of physical goods and services, and then into the realm of self-realization and self-actualization.

Above a certain level of income, therefore, people will strive to improve their living standard through access to opportunities that vary with an individual's personality, including intellectual expression, adventurous travel, and spiritual development. Many such expressions of self-actualization have implications for the type of society in which the individual lives. Increasingly, understanding of the holistic nature of the environment and its impact upon personal health and well-being is stimulating citizen demands for cleaner air, safer streets, and general improvements in the living conditions of public spaces. Increasing the standard of living, therefore, is associated with improving the accountability and responsiveness of government.

The ways in which the standard of living is defined change in terms of both time and space. The five treasures of Chinese consumer life no longer include the sewing machine and radio, but are now the mobile telephone and television. In many cultures, an acceptable standard of living is defined by access to sufficient goods to provide a dowry and hence become married. Societies that favor interdependency in family life value a standard of living in which many family members can live together, which is anathema to the independence valued by many Western people.

Governments may try to promote the standard of living by increasing income opportunities, providing services that enhance the ability of people to take advantage of opportunities, or providing support for vulnerable individuals, in some cases by reducing household size.

Since the standard of living depends on total household income divided by number of household members, the standard may rise with more income or fewer people. The Chinese government enforced (with considerable social cost) a one-child-per-family policy with a view to improving household standards of living. Other governments have acted in more subtle fashion by increasing career opportunities for women, which has had a similar effect.

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