Tuesday, 8 April 2014

The Standard of Living

Pretty much everything in VCE Economics comes back to the standard of living. What this means is a difficult thing to pin down.

What we do know is:

* GDP alone is a poor indicator.
* Real GDP per capita using PPP is a much better one, but misses critical issues.
* The Human Development Index includes important additional factors and can be used to compare and monitor changing living standards.

However there isn't a perfect measure as non-material living standards are very difficult to measure and very different across nations.

The Social Progress Index tries to monitor living standards using a wide range of indicators. Australia still does well, but comes 10th (rather than 2nd in some HDI rankings). The 2014 data is linked below and it is well worth a look to try and grasp what standard of living really means and what can affect it.


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