The Difficulties in Comparing the Standard of living between countries.

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                                                                                                                       Sun Di (Std ID: 030703)

The Difficulties in Comparing the

Standard of living between countries

          The standard of living is a complex subject that has been debated over the past couple of centuries. What do we mean by a “standard of living”? Probably no two people would describe this term in exactly the same way. A useful way to begin to understand the issues is to imagine that you had to live in another country. Suppose you would be born again at random to parents of a country, which you could choose according to only a couple of characteristics? What characteristics would you want to know before making a choice? Most people would like information on the material standard of living, say a nice car, a pleasant place to live, clothes, furniture, appliances, food, vacations, maybe even education. Other choices are political and religious freedom; opportunities for social and economic mobility; the degree of social and economic inequality; and climate. In my point of view, I believe that the standard of living is               . 

The countries’ standard of living comparison data provides the essential information for each country’s government and identifies progress of each country. Nevertheless, there are many difficulties in trying to compare the living standard between countries. I would like to cover three significant difficulties in this paper.

                                                                                                                                                               

Section І focuses on many different measures that can indicate a “higher or lower” standard of living, such as gross domestic product (GDP), The Genuine Progress Indictor (GPI), Human Development Index (HDI) and Engel’s Law and Index of Social Health. In Section П, I will exposit how exchange rate influences the standard of living comparison. The Section Ш presents the difficulties in comparing living standard in the non-balance development countries. Last, I conclude a few summary observations.

І. Alternative Measures of Standard of Living

        To compare the standard of living between countries is similar to choose the most beautiful flower, that is, different person has different yardsticks. Put various kinds of beautiful flowers in front of people’s eyes and asking for the answer of the most beautiful flower. Due to the dissimilar culture, education background, age, gender and others, people may have distinct taste.  Yet, asking us to measure standard of living, we will probably look at the following methods:

Real GDP (Gross Domestic Product) per capita. The rate of growth of real GDP per capita is the most commonly used measure of change in a country’s standard of living, as it is a measure of change in material well-being.

If average real GDP per capita is increasing, there’s a strong likelihood that: (a) more goods and services are available to consumers, and (b) consumers are in a better position to buy them. While buying more things won’t necessarily help us find true happiness, true love, or true enlightenment, it is a pretty good indicator of our material standard of living.

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However, GDP per capita is an inadequate measure of countries’ immediate material well-being, even apart from the general practical and conceptual problems of measuring countries’ national outputs. As a tool for measuring how well we live, GDP per capita has its shortcomings. Critics expressed concern that GDP per capita failed to reflect a number of important aspects of human welfare, and pointed to some notable disparities in the ranking of countries based on GDP per capita compared with other possible indicators of well-being, such as length of life and education. Other Critics feared that if policymakers focused on GDP ...

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