Living Standards Flashcards
Define:
Living standards
The amount of wealth, comfort, material goods and necessities that a particular individual, society or country has.
Define:
Material standard of living
- Measures the quantity and quality of goods and services accruing to each person in the country.
- Refers to our access to physical goods and services.
Define:
Non-material standard of living
Measures intangibles and focuses on quality of life which include dimensions like life expectancy, literacy rate, leisure hours, etc.
Examples of material standard of living
- Income
- Housing
- Access to amenities
Examples of non-material standard of living
- Environment
- Leisure time
- Work-life balance
Political freedom
How is material standard of living assessed?
Real GDP, real GNP, real GDP per capita.
How is non-material standard of living assessed?
- Surveys (personal experiences)
- e.g. OECD (organisation for economic cooperation and development) Better Life Index
Factors that affect material standard of living
Producing goods and services provides citizens with employment, and therefore an income to buy goods and services that improve their lives.
Factors that affect non-material standard of living
- Freedom of speech
- Being able to peacefully protest against the government
- Free elections
- Provide the right to choose and dismiss parliamentary representatives
- Low levels of crime and discrimination
- Preservation of the environment
- Adequate leisure time
Define:
Poverty
- The state in which an individual or household is not able to fulfil minimum consumption needs.
- Not always about money, but also access to basic facilities such as hygiene, sanitation, food, shelter, drinking water, health, education, transport.
Define:
Absolute poverty
When there is an absence of a minimum level of subsistence needed for the basic well being
- A failure in meeting the basic necessities of life (i.e. food, water, clothing, and shelter) and access to the amenities like sanitation, education, medical care, information etc., which is necessary for an individual’s physical and social well being.
Define:
Relative poverty
When poverty is measured in relative terms, such as income or consumption of other people, it is called relative poverty. (E.g. low income)
- The state in which a person lacks the least amount of income required to maintain the normal standard of living, in the society to which they belong.
- These people are considered impoverished, as they are relatively poor when compared to other members of society.
- The increase in the wealth of the society results in the increase in income of its members and resources they can afford, which changes the society’s standard of living and so relative poverty changes with time.
Define and state:
Poverty line
- An estimated minimum household income threshold, which is required to fulfil the basic necessities of life. Any person below this threshold is identified as poor.
- The internationally agreed upon poverty line is $1.90 USD a day. ~ $2.96 AUD
Define:
Income
Money that an individual or business receives, usually in exchange for providing a good or service or through investing capital.
How is income earned?
For retirees, individuals, and businesses.
- Investments, pensions, and forms of welfare payments are primary sources of income for retirees.
- For individuals, income is most often received in the form of wages or salary.
- Business income can refer to a company’s remaining revenues after paying all expenses and taxes. Int his case, income is referred to as “earnings”. Most forms of income are subject to taxation.
