Standard of Living

Standard of Living refers to the necessaries, comforts and luxuries which a person is accustomed
to enjoy.

It can be defined as the mode of living. In other words, the standard of living of the people
means 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 and
individual 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 total
volume of production in the country. The countries having higher national income enjoy
higher standard of living.
2. Level of productivity: The national income depends upon the productivity of a person
engaged in agriculture, industry, industry or any economic activity. Thus high
productivity resulted in high national income and high standard of living. The advanced
countries 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 income
and size of population. Thus if size of population is larger, the per capita income will be
smaller and as such standard of living will be lower.
4. Distribution of National Income: It the distribution of income is not equal, the standard
of living will affect. National income which has been ill distributed resulted into wide
disparity. Thought the per capita income is higher, Due to ill distribution of income few
rich person only enjoy higher standard of living and the masses of people have to live
with extremely low standard.
5. Level of Education: Generally it is observed that educated people tend to have high
standard of living on the contrary the illiterate people are reluctant to improve the living
standard even though they are provided large income.
6. General Price level: Different countries are having different price levels. The country
having 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 level
of its exports to the price level of its imports, thus only physical production is not
sufficient to have higher standard of living, the terms of trade is also equally important in
this regard.

B. Factors determining individual standard of living:

Following are the important factors on which the standard of living of a person depends
1. Income 2. Size of family 3. Family tradition
4. Education 5. Social customer 6. General price level.
Causes of low standard of living in India:

1. Low national income

2. Large size of population
3. Religious traditions
4. Social and family obligations.
5. Under development - Means economically under development in respect agriculture, industry
etc. Hence total national income is low and hence low standard of living India is enjoying.