GDP per capita is the commonly accepted indicator of standard of living, which is calculated by dividing the gross domestic product with the population. The standard of living of a family or residents of the region basically depends on several factors like income, employment rate, poverty rate, quality of education and healthcare, religious and social freedom, level of crime, rate of inflation, infrastructure, life expectancy, economic and political stability, etc. It is used to determine the relative prosperity of a demographic group in a country. Standard of Living, as the name suggests is the degree to which a particular socio-economic class can avail the wealth, comfort and material items, in a particular area. Some countries with the highest cost of living are Bermuda, Switzerland, the Bahamas, Norway, Denmark, Iceland, Luxembourg, Singapore, etc. advancement of technology, modernisation and industrialisation lead to the increase in the cost of living.Ĭost of living is measured by ascertaining the average cost of the basket of goods and services which are essential for livelihood, for the people living in that area. With the help of cost of living, one can easily make a comparison between one place to another, as it differs from area to area and also changes over time, i.e. It determines what amount you pay, for availing the necessary items and amenities. How well the people of a particular class live, without compromising their needs and wants.Ĭost of living index and Purchasing Power ParityĬost of Living refers to the amount of money required to maintain a minimum standard of living, by being able to afford the basic necessities of life such as food, clothing, shelter, transportation, telephone and internet, recreation, education, healthcare, taxes and other utilities. How expensive it is to survive in a place, in comparison to another. Standard of living refers to the level of money and well-being, that people enjoy in a particular country. Content: Cost of Living Vs Standard of LivingĬost of living implies the general level of prices of the goods and services which a common man can afford, for his regular needs. ![]() In this article excerpt, you will understand the differences between cost of living and standard of living, take a look. Conversely, the standard of living refers to the level of material comfort possessed by an individual or a group in society. the expense that people incur to live in a geographical location. Cost of living is nothing but the cost of subsistence, i.e. There are instances when people often misinterpret these two and use them interchangeably, but they are very different from one another.
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