Standard of LivingStandard of Living refers to the necessaries, comforts and luxuries which a person is accustomedto enjoy.It can be defined as the mode of living. In other words, the standard of living of the peoplemeans the quantity and quality of their consumption.Factors determining standard of living:The factors affecting the standard of living have been discussed below, in respect of country andindividual separately.A. Factors of which the standard of living in a country depends.1.Level of national income (output): The level of national income depends upon the totalvolume of production in the country. The countries having higher national income enjoyhigher standard of living.2.
Level of productivity:
The national income depends upon the productivity of a personengaged in agriculture, industry, industry or any economic activity. Thus high productivity resulted in high national income and high standard of living. The advancedcountries enjoy high standard of living because their productivity is high.3.
Size of population:
The per capita income can be estimated by the total national incomeand size of population. Thus if size of population is larger, the per capita income will besmaller and as such standard of living will be lower.4.
Distribution of National Income:
It the distribution of income is not equal, the standardof living will affect. National income which has been ill distributed resulted into widedisparity. Thought the per capita income is higher, Due to ill distribution of income fewrich person only enjoy higher standard of living and the masses of people have to livewith extremely low standard.5.
Level of Education:
Generally it is observed that educated people tend to have highstandard of living on the contrary the illiterate people are reluctant to improve the livingstandard even though they are provided large income.6.
General Price level:
Different countries are having different price levels. The countryhaving low price level can provide good standard of living to her people and vice-a versa.7.
Terms of trade:
The terms of trade can be measured by the taking the ratio of price levelof its exports to the price level of its imports, thus only physical production is notsufficient to have higher standard of living, the terms of trade is also equally important inthis regard.
B. Factors determining individual standard of living:Following are the important factors on which the standard of living of a person depends1. Income 2. Size of family 3. Family tradition4. Education 5. Social customer 6. General price level.