Monetary cost of maintaining a particular standard of living, usually measured by calculating the average cost of a number of goods and services.
Measurement of the cost of a minimum standard of living is essential in determining relief payments, social-insurance benefits, and minimum wages . The cost of living is customarily measured by a price index such as the consumer price index . Measurements of change in the cost of living are important in wage negotiations. Cost-of-living measurements are also used to compare the cost of maintaining similar living standards in different areas. See also social insurance .