Living standards

The standard of living refers to the quality and quantity
of goods and services available to people, and the way
these goods and services are distributed within a population.
It is generally measured by standards such as real income
per person and poverty rate. Also there are other measures
such as access and quality of health care, income growth
inequality, educational standards.

We take several data such as National Income Indicators,
Income distribution, Population, Health Indicators, Energy
and the environment, Education, Communications and
Distribution of GDP by sector and by demand to compare
the standards of living of Ethiopia Ghana, Indonesia, Pakistan,
Colombia, Russian Federation, Czech Republic, New Zealand,
UK and USA.

Referring to the first data which is National Income Indicators
we can see that the lowest Gross national income is in Ethiopia
and the highest in the USA but we can’t compare the standards
of living using only this data. As we can see on this data gross
national income in Indonesia is bigger than in Pakistan. However
gross national income per capita in Pakistan is much bigger t
han in Indonesia thus PPP is also bigger than in Indonesia.
This difference depends on the population as well. Population
size in Indonesia is much bigger than in Pakistan. So even if whole
gross national income is bigger in Indonesia gross national income
per head will be greater in Pakistan.

In the second data we can see that in Colombia is the highest
percentage of income distributed to people with the highest
income while people with low income have the lowest percentage
of income distribution comparing with other countries. That
means even if in Colombia gross national income is high
(comparing with Ethiopia Indonesia etc.) and PPP is also
high there is a problem of poverty. People with low income
have only 2.7% of income distribution.

The third data tells us about population. According to this
data we can see that in countries such as Ethiopia, Ghana,
Indonesia, Pakistan, Colombia percentage of young population
(0-14) is extremely high while percentage of old population (65+)
is very low. If we compare to another countries such as Russian
Federation, Czech Republic, New Zealand, UK, USA we can see
the difference between this countries. In these countries percentage
of old population is much bigger than in Ethiopia, Ghana, etc. This
might be because in industrial counties (UK, USA) people have
better standards of living and thus live longer than in emerging
economy countries.

The next data is about health indicators which are very important
in measuring standards of living. We can see from this data that
in Ethiopia and in Ghana life expectancy at birth is very low and
under-five mortality rate is extremely high. Even if population
of these counties is growing and it has a big percentage of young
population they have an enormous rate of mortality of children.
This might be because most of the population don’t have an
access to a healthcare, to safe water and to sanitation facilities.
This data is also very important in measuring standards of living
and therefore we can say that in Ethiopia and Ghana standards
of living is low comparing to the USA, New Zealand, and UK etc.

Let’s look to the next data which is about energy and the
environment. As we can see in countries such as Russian
Federation, Czech Republic, New Zealand, UK, USA energy
use per capita is very high comparing to other countries. This
can also tells us about standards of living in these countries.
The more income people have the more they will spend on
energy. Therefore if people use a lot of energy it will cause
pollution. We can see that in countries with high energy use
pollution is also high.

Education data is also very important in measuring standards
of living. As we know from definition of standards of living it
is refers to the quality and quantity of goods and services
available to people, and the way these goods and services are
distributed within a population. So standards of living also
depend on availableness of education and distribution of it
within a population. We can see on the data that in emerging
economy countries such as Ethiopia adult literacy is very low
(less than half) and percentage of children in the labour force
is high. This can be because people don’t have enough access to
education and children often go to work instead of school. As
standards of living are higher people have more chances to
get education as in the USA, UK, Russian Federation, Czech
Republic and New Zealand.

Data about communication is also important in measuring
standards of living. This tells about how communication
services such as paved roads, telephone mainlines, TV’s,
mobile phones, personal computers and Internet access
distributed within a population. As we can see countries
with low standards of living such as Ethiopia, Ghana and
Indonesia has low access to communication services comparing
to countries with rich economy.

The last data is about distribution of GDP by sector and by demand.
There are three main sectors such as agriculture, industry and
services. The more percentage of GDP distribution has service
sector the higher standards of living of country.

So there are a lot of things that we should consider when we
measure the standards of living. We can’t measure it according
to one data for example only national income statistics. We
should also consider health indicators, education, population,
communication etc. Real GDP per capita does have some
limitations when assessing the standard of living.
They are:
· Regional Variations in income and spending
· Inequalities of income and wealth
· Economic growth and externalities
· Leisure and working hours
· The balance between consumption and investment
· The black economy and non-monetised sectors.