Economics Tuition – Are qualitative aspects of standard of living accurate in measuring standard of living?

From the previous article, we talked about the non-material aspects of SOL such as life expectancy, education level, leisure time, unpaid work, environmental damage etcetera. We also brought in the concept of HDI and MEW as indicators of the qualitative aspect of SOL.

We will be using the HDI and MEW as relevant indicators to reason their accuracy in measuring the SOL.

While the quantitative and qualitative aspects of SOL are different in nature, they are linked and even dependent on each other. The HDI and MEW are accurate in determining the qualitative aspect of SOL because they are not completely devoid of the quantitative components. The HDI makes use of National Output, a quantitative measurement, the life expectancy and education level of the country as an indicator while the MEW places a value on the non-material aspects and adds it on to the country’s Gross Domestic Product (GDP) as an indicator.

However, it can be argued that it is not likely for either the HDI or MEW to be completely accurate as they are at most reliable estimates. It is impossible to place a value on non-material aspects of SOL such as the value of leisure time, unpaid work (e.g. housework) and even environmental damage. It is also impossible to give an indexed value for the interactions between Real Income per Capita, life expectancy and education level.

It is vital that we remember the definition of SOL and that it consist of two components. Both components are important and have to be taken into account when trying to evaluate a country’s SOL. Simply taking either the quantitative aspect or qualitative aspect is not enough, even if it is more convenient, and would not give an accurate result of a country’s SOL.

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Article 1
What is standard of living?

Article 2
What is the standard of living like in Singapore?

Article 3
Is real income per capita a good indicator for standard of living?

Article 4
Why must we use qualitative economic indicators to measure standard of living?

Article 5
What are the non-material aspects of standard of living?