Standard of Living: What It Means for You and How to Improve It


The standard of living is a measure of the quantity and quality of material goods and services available to a population. It is typically assessed using metrics like GDP per capita. This article explores the definition of standard of living, how it’s measured, and provides examples of countries with varying standards of living.

Understanding standard of living

Standard of living is a crucial economic indicator that assesses the well-being of the average person in a given population. It focuses on various material factors, including income, gross domestic product (GDP), life expectancy, and economic opportunities. While closely related to quality of life, which encompasses intangible aspects such as personal liberty and environmental quality, the standard of living primarily addresses physical and material aspects.

Measuring the standard of living

The standard of living is commonly measured using per capita GDP. This metric offers a quick estimation of the total goods and services available per person. Although more complex metrics exist, they often correlate highly with per capita GDP. Developed countries usually exhibit higher standards of living, with basic measures like per capita GDP often used to differentiate between more and less developed nations.

Standard of living example

One widely used measure of standard of living is the United Nations’ Human Development Index (HDI). HDI scores 189 countries based on factors like life expectancy, education, and income per capita. As of 2019, the countries with the highest HDI scores include Norway (0.957), Ireland and Switzerland (0.955), Hong Kong and Iceland (0.949), and Germany (0.947). Conversely, the countries with the lowest HDI scores are Niger (0.394), Central African Republic (0.397), Chad (0.398), Burundi and South Sudan (0.433), and Mali (0.434). The United States ranks 17th, while China is 85th.

For example, Norway, with an HDI score of 0.957, boasts a life expectancy of 82.4 years, 18.1 expected years of schooling per citizen, a GNI per capita of $66,494 (purchasing power parity-adjusted currency units), and an internet usage rate of 96.5% of its population. In contrast, Niger, with a score of 0.394, has a life expectancy of 62.4 years, 6.5 expected years of schooling, a GNI per capita of $1,201, and an internet usage rate of 5.3%. The U.S. ranks 17th with a combined score of 0.926, a life expectancy of 78.9 years, 16.3 expected years of schooling, and a GNI per capita of $63,826.

Standard of living vs. quality of life

Although the terms “standard of living” and “quality of life” are often used interchangeably, they have distinct meanings. Standard of living primarily pertains to wealth, comfort, material goods, and necessities within specific classes and areas. It encompasses more objective characteristics. On the other hand, quality of life is subjective and intangible, encompassing personal liberty, environmental quality, and individual preferences.

It’s important to note that what constitutes a good quality of life can vary significantly from person to person. Characteristics that define a high quality of life for one individual may not hold the same significance for another.

Factors influencing standard of living

Several factors can significantly influence the standard of living in a given region:

  • Economic policies: Government policies, such as taxation, trade regulations, and labor laws, play a crucial role in shaping a nation’s standard of living.
  • Technological advancements: Technological progress can lead to increased productivity, lower production costs, and a rise in the standard of living.
  • Education: Access to quality education can improve individuals’ skills and employability, positively impacting their standard of living.
  • Healthcare: Availability of affordable and accessible healthcare services can lead to longer life expectancies and higher standards of living.

Regional disparities in standard of living

Standard of living can vary significantly between regions within a country or between countries. These disparities are often due to:

  • Income inequality: Regions with unequal income distribution may have a lower average standard of living.
  • Urban vs. rural areas: Urban areas often offer more economic opportunities and better access to services, leading to higher standards of living compared to rural areas.
  • Infrastructure: Well-developed infrastructure, including transportation, communication, and utilities, can boost the standard of living in certain regions.


The standard of living is a critical metric for evaluating the material well-being of a population. It offers insights into economic development, disparities between nations, and improvements over time. Understanding this concept is essential for policymakers, economists, and individuals concerned with improving living conditions and overall well-being.

Frequently Asked Questions

What is the difference between standard of living and quality of life?

The standard of living primarily focuses on material factors like income and access to goods and services, while quality of life encompasses more subjective aspects such as personal well-being, environmental quality, and happiness.

How is the standard of living measured?

The standard of living is commonly measured using metrics like GDP per capita, which provides an estimate of the average income and economic well-being of a population. The Human Development Index (HDI) is another widely used measure that considers factors like life expectancy, education, and income per capita.

Why is the standard of living important?

The standard of living is a crucial indicator for assessing the well-being and economic development of a population. It helps policymakers make informed decisions, allows for comparisons between regions and countries, and tracks improvements over time.

What are some factors that can improve the standard of living?

Several factors can positively impact the standard of living, including economic policies that promote growth, technological advancements that increase productivity, access to quality education, and affordable healthcare services.

What are the consequences of a low standard of living?

A low standard of living can result in inadequate access to basic necessities, limited economic opportunities, and poorer overall well-being for a population. It may also lead to social and health disparities.

How do regional disparities affect the standard of living?

Regional disparities can lead to variations in the standard of living within a country or between countries. Income inequality, differences in urban and rural development, and varying levels of infrastructure can contribute to these disparities.

Can the standard of living change over time?

Yes, the standard of living is not static and can change over time. Economic growth, technological advancements, and policy reforms can lead to improvements in the standard of living for a population.

Is a high standard of living always synonymous with a high quality of life?

While a high standard of living contributes to a good quality of life, the two concepts are not identical. Quality of life includes subjective factors like personal happiness and environmental quality, which may not always align with material wealth.

Key takeaways

  • The standard of living measures the quantity and quality of material goods and services available to a population.
  • It is typically assessed using metrics like GDP per capita and the Human Development Index (HDI).
  • Standard of living and quality of life are related but address different aspects of well-being, with the former focusing on material factors and the latter encompassing more subjective elements.
View article sources
  1. Raising Living Standards – London Datastore
  2. Inflation and the Cost of Living –
  3. 2023 Allowable Living Expenses National Standards – IRS