Standard of Living

Standard of living is usually judged by access to things such as housing, food, healthcare, education, transport, leisure and technology. A higher standard of living means people can afford more and better versions of these.

For countries, economists often use income or output per person, such as GDP per person, as a rough measure. A country producing more goods and services per person can, on average, afford a higher standard of living. However, averages can hide large differences between rich and poor.

Standard of living is closely linked to the cost of living. An increase in wages raises the standard of living only if it is larger than the increase in prices. If wages rise by 3% while prices rise by 5%, people can afford less than before, so their standard of living falls.

Many people also consider factors money cannot fully capture, such as working hours, health, safety and the environment. Broader measures of quality of life try to include these alongside income.