LIVING, STANDARD OF

in social science, the aspirations of an individual or group for goods and services. Alternatively, the term is applied specifically to a measure of the consumption of goods and services by a particular person or group, sometimes called level of living (what is) as opposed to standard (what is desired). Both include not only privately purchased items but also items that lead to an increased sense of well-being but are not under the individual's direct control, such as publicly provided services and the quality of the environment. Some social scientists maintain that a person's standard of living (in terms of his aspirations) is strongly influenced by the consumption pattern of his income peers, in which case an individual's standard of living may be expected to change as incomes change. In speaking of the standard of living of a group of people, such as a country, care must be taken to distinguish between the average value of some measure of actual consumption and the dispersion around that average. If, for example, the average value increases over time, but at the same time the rich become richer and the poor poorer, it may not be correct to conclude that the group is collectively better off. Accordingly, comparison of standards of living among countries that exhibit widely differing degrees of dispersion can be extremely difficult. In practice there are wide disparities both within countries and among countries. By most criteria, the differences in living standards between developed and less developed countries are vastly more acute than the differences that exist between countries with developed economies, whether capitalist or socialist. These general problems are evident regardless of what quantitative indicators are taken as measuring rods for the standard of living. Apart from income, useful indicators may include an index of consumption of certain foodstuffs such as protein, a measure of life expectancy, and access to basic amenities like a safe water supply. These indices also involve serious problems of comparability among nations and regions, however, especially since even the most basic data, such as reliable population estimates, may be unavailable for some very poor countries. Besides omitting important components that do not appear in marketable form and therefore are not included in conventional national income accounts, the use of a dollar measure of real income or consumption as a guide to living standards involves important technical difficulties. Even the items that are measurable in monetary terms may have been valued at distorted prices. International comparisons using official exchange rates can be particularly misleading, especially where the foreign exchange market is manipulated by governments. Comparisons over time need to be adjusted for differences in price levels, but this is not always a simple matter. If relative prices of various goods and services differ substantially between two countries, it is particularly difficult to compare standards of living, interpreted as consumption levels. For international statistical data and indicators on standard of living, see the Britannica World Data section in the Britannica Book Of The Year.