How Could We Measure Standard of Living?

Discussion in 'Business & Economics' started by TruthSeeker, Mar 20, 2007.

  1. TruthSeeker Fancy Virtual Reality Monkey Valued Senior Member

    Yeah, yeah... there's GDP and GDP per capita... but those measures are much more useful to governments and corporations- they are not that useful to people. Factors such as health, environment, crime and sustainability are not taken into account when measuring the GDP. So how could we measure standard of living more accurately? Any ideas? :shrug:

    PS: I've been working a bit on it and I might share it later, if I get to some conclusion...
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  3. Mr. G reality.sys Valued Senior Member

    Economic standard, schmandard.

    You live according to your own abilities. Your quality of life is no more my principle concern than mine should be made to be for you.

    The standard of living should be a daily look in the mirror.
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  5. timmbuktwo Registered Senior Member

    No, Mr.g . the standard of living in a country is not based on "your" personal needs and abilities . It is deemed and should stay as such of the populous , on a somewhat average. As much as you may not want to compare yourself with the "rich" , they may not want to so with you either, therefore a average comes into play.
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  7. Mr. G reality.sys Valued Senior Member

    That's G, dude.

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    Gold Standard, old schmandard.

    The question was "How could we measure standard of living?"

    I'm suggesting we use personal responsibility as the Gold Standard.

    If the scope of possible responses to the question should be narrower, the focus of the question should have been more standardized.
  8. vslayer Registered Senior Member

    -the average level of education.
    -the quality(and possibly price) of healthcare.
    -how many people can be housed, clothed and fed on the average income.
    -how well welfare is distributed.
    -the average amount of hours worked.

    thats what i would use as a measure.
  9. Mosheh Thezion Registered Senior Member

    by the food we eat... the clothes we wear.. the strength and safety of our homes.. and the availble working service and industrial assets we have access to in the living of our daily lives.

  10. nirakar ( i ^ i ) Registered Senior Member

    Install hidden cameras, then measure the smiles and frowns of people who are caught on film while alone in non social situations. In social situations some cultures may fake smiles more than other cultures do.

    Which is a better standard of living, an Earth that has only 100 hundred people on it but they are very happy people or an earth that has 100 billion people on it but they are very miserable people? Would an Earth with no people on it but containing a trillion highly productive robots that are very busy producing an extreme abundance of everything that people would want if humans had not gone extinct have a higher standard of living than an earth with only a few thousand stone age cavemen living on it?

    What is more important, happiness, health, population, or product. Did the forcing slaves to build the great pyramids in ancient Egypt mean that Egypy had a higher or lower standard of living than Egypt would have had if the slaves had been allowed to spend their time napping and playing games?
  11. RoyLennigan Registered Senior Member

    There is something like what you are talking about already in use. It shows development, in essense, as it is widely defined. Its called the HDI, or Human Development Index.

    It is a "comparative measure of life expectancy, literacy, education, and standard of living for countries worldwide."
  12. spidergoat pubic diorama Valued Senior Member

    I have heard of some simple standards, such as how much it costs to buy a single egg.
  13. nietzschefan Thread Killer Valued Senior Member

    How much garbage they produce. Yea, it's that simple.
  14. quadraphonics Bloodthirsty Barbarian Valued Senior Member

    Besides GDP per capita, other common measures include life expectancy and refrigerators per 1000 people. Beyond that, there are measures of "quality of life" and "human development," which are intended to be somewhat broader (and, by implication, that much harder to measure consistently, especially on a global scale). The trouble with the more complex measures is that their definition is often politicized (how much you weight income vs. health care vs. environment vs. free time vs. etc.), and so they can be dicey. For example, the EU employs an entire army of beaurocrats who do nothing but invent measures that result in the EU comparing favorably to the US, despite the per capita GDP being so much lower.

    Another issue is that most of the measures describe only averages, and so don't distinguish between countries with different levels of inequality. This is another factor that is often politicized; a preference for lower inequality over higher per capita income is pretty much the definition of socialism.

    It may be, then, that there is no appropriate global measure of living standards in the broad sense. Every country can invent a measure that embodies their preferences and use it to claim that they have the world's highest standard of living, and they'll all be right (provided they allow people to migrate freely). So, there are two good reasons to use per-capita GDP: it's a number that can be directly measured and compared and, as per-capita GDP goes up, you can assume that the population in question has the resources to pursue policies that mesh with their priorities (regarding health care, free time, etc.). While it is problematic for making fine comparisons between similar countries, it has a good overall (large-scale) correlation with pretty much any reasonable measure you'd care to use.
  15. Lord Hillyer Banned Banned

    The ability of the average 80 year old to afford quality organic food, along with all necessary medical care.
  16. Prince_James Plutarch (Mickey's Dog) Registered Senior Member

    The ability to pursue excellence in one's chosen path.
  17. Fraggle Rocker Staff Member

    Why do you zealots keep tossing "organic food" into every thread about economics? Don't you get it that the vast majority of the population doesn't give a rat's ass about it? It's expensive to produce and it doesn't store well. There's no way that it will ever be available to the general population at an affordable price, unless the world population is slashed by about 90 percent. If you insist on including your personal crusades in the standard of living, you're going to come up with a standard that nobody relates to and it will be a useless exercise.

    How about if I insist that the standard of living means that every household must have two pedigreed dogs? Or tickets to a live rock and roll concert once a month? Those things are far more important to me than your stupid hippie health food! And I suspect if you took a poll of the human race, more people would want dogs and rock music than organic zucchini.

    My standard of living includes home made pizza, doughnuts, and chocolate truffles.
  18. swivel Sci-Fi Author Valued Senior Member

    Haha. Wonderful post.

    And don't fret. Organic is now frowned on by the ultra-snobby hippies. They are screaming "EAT LOCAL!" now. These fruits are like the indie music fans that just hate it when their little group makes it big. And now that the "evil-big-corporations" are producing organic foods and *shock* making money off of the demand, the hippies are rushing off to find the next meaningless trend to help them feel superior.

  19. ubermich amnesiac . . . Registered Senior Member

  20. psikeyhackr Live Long and Suffer Valued Senior Member

    Why don't you make accounting mandatory in the schools and tell all of the kids they are supposed to concentrate on NET WORTH?

    Part of that is avoiding depreciation. Going into debt to buy junk designed to depreciate is economically stupid.

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    I have an 800 page accounting book with lots of color glossy pictures but nowhere does it have a diagram like this. It doesn't mention the chart of accounts until page 72 and doesn't get to depreciation until 624. It claims to be a 1st year course. Accounting is so easy everything most people need to know could be covered in a semester.,1370,-1019-11714,00.html

  21. ubermich amnesiac . . . Registered Senior Member


    psik you have the most randomass posts. what does net worth have to do with a standard of living. standards of living be indices that correlate with at least one aspect of a "good life" (e.g. longevity, health, possession of durable goods, etc.). t-accounts don't, as it says explicitly in the diagram.

  22. psikeyhackr Live Long and Suffer Valued Senior Member

    You don't think a net worth of $1,000,000 would go a long way to contributing to your having a good life? So you already have $50 million already and that wouldn't matter much?

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    Having a mortgage payed off would be included in net worth. That means the individual doesn't have to make monthly payments for mortgage or rent. It could mean if they lose their job they are still OK. The trouble is this society emphasizes cash flow too much. Someone could have what might be a comfortable income and look like they are doing good and have credit cards charged up to the max and spending thousands on interest. I think the problem is everyone is accustomed to not thinking of net worth. We have been brainwashed into being DUMB. :shrug:

    I think standard of living is vague bullsh!t actually. Economists like it that way.

  23. ubermich amnesiac . . . Registered Senior Member

    im not arguing against using net worth. i just don't understand how net worth can be used as a standard of living, which is an index that must be able to apply across countries.

    if i understand you correctly, it seems that your logic implies that high-saving individuals should have a better quality of life since assets are much greater than liabilities (assuming depreciation on average affects us all the same). This seems wrong empirically. Asian countries and the Middle East have much higher national savings rates than do the US and the EU, but it is arguable whether the average consumer in these nations have "better" qualities of life. Typically, Asian workers work much longer hours and have less vacation than US workers, who in turn work longer and have less vacation than do European workers. Does that not say something about the "quality of life"?

    Furthermore, at least one reason why we emphasize cash-flows over net savings is because a number of factors that define cash-flows determine net savings. For example, what you would do with a dollar that you receive unexpectedly (say, a private transfer from a family member) is different from a one dollar pay raise. In that sense, studying cash flows can tell you more about a person's behavior than simply how much they have in an account.

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