Economics Tuition – What are the non-material aspects of standard of living?
Having talked about the importance of having qualitative indicators in our standard of living (SOL) during our previous article, we now move on and discuss what the non-material aspects of SOL are.
Essentially, the non-material aspects of SOL are those that are not determined economically such as via the Real Income per Capita. They are intangible, qualitative and are normally less obvious when compared to its quantitative counterparts. We have to think more the underlying implications of the non-material aspects and how they affect our SOL.
The Human Development Index (HDI) is a measure of a non-material aspect of SOL. The HDI determines the degree of progress and the well-being of the citizens of a country. It is a measure of and uses the life expectancy as well as education levels to determine the qualitative aspect of SOL and how good the citizens’ quality of life are on top of the Real Income per Capita that they have. The life expectancy and education levels or the citizens are crucial non-economic factors that affects a person’s SOL.
The Measurement of Economic Welfare (MEW) is another measure of a non-material aspect of SOL. It will determine the value of the qualitative aspects of life in monetary term. The quantitative aspects of SOL fail to take into account the value of a person’s leisure time, unpaid work and even environmental damage and the resulting externalities. These are all crucial factors in determining a person’s quality of life as they are either necessary or out of their control. The MEW places an economic value of those activities, on top of national output, to provide a more ‘realistic’ assessment of SOL.
Discover the wondrous and exciting field of Macroeconomics as our economics tuition will explore the different aspects of National Income Accounting and Economic Indicators together with students. You will learn how to identify different indicators and analyze the effectiveness of these indicators. Read the following articles featured below to get started in this enriching journey!
What is standard of living?