What Are the Different Ways to Measure Standard of Living?

Living standards refer to changes in the objective conditions or the environment of material and spiritual life related to people's income or consumption levels. It is usually measured and evaluated through people's clothing, food, housing, and transportation, as well as health, education, culture, entertainment, social and other objective indicators that reflect people's living conditions or the environment. Mainly around the levels of "needs, deprivation, work, production, income, consumption", these concepts are considered to be quantifiable. One of the main indicators for measuring and comparing living standards is the Engel coefficient of a country or region. The so-called Engel coefficient is the ratio of food consumption expenditure to total household expenditure or total income. The Food and Agriculture Organization of the United Nations has proposed a general criterion for determining the stage of life development with the Engel coefficient: more than 60% are poverty; 50% -60% are food and clothing; 40% -50% are well-off; and less than 40% are rich. The standard of living is different from the quality of life. The standard of living refers to the material and non-personal resources that can control, improve and maintain the quality of life, and the quality of life is the satisfaction of social needs. The latter can be evaluated with subjective indicators, while the former can only be evaluated with objective indicators. ^[1]

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The determination of living standards includes 3 points:

Living standards include a series of satisfying residents

Employed population in urban households

Refers to the urban residents who are engaged in social labor and receive labor compensation or operating income. The employed population includes the introduction of employment by the labor department through national overall planning and guidance, voluntary organization of employment and self-employment, etc., in state-owned, collective-owned, Sino-foreign joint ventures, Sino-foreign cooperation, wholly foreign-owned enterprises, institutions and private enterprises The population working in the unit or engaged in individual labor has a fixed occupation or a temporary occupation. Retirees hired and retained are also counted as employed. This indicator can reflect the employment situation of urban residents, and is an important data for calculating the employment area and burden coefficient.

Total income of urban households

Refers to the actual cash income of the surveyed urban households, including regular or fixed income and one-time income. Excluding revolving income, such as withdrawing bank deposits, borrowing money from relatives and friends, recovering lending money, and various other temporary collections.

Disposable income of urban households

Refers to the remaining actual income of the surveyed urban households after paying personal income tax.

Consumption Expenditure of Urban Households

Refers to the total expenditures of the investigated urban households for daily life, including expenditures on purchasing commodities and non-commodity expenditures such as cultural life and services. It does not include confiscated, lost money and various taxes paid (such as personal income tax, license tax, real estate tax, etc.), nor does it include various expenses incurred during the production and operation of individual workers.

Expenditure for purchase of goods by urban households

Refers to the total expenditures of surveyed urban households to purchase commodities, including expenditures on purchasing various commodities directly from shops, factories, restaurants, workplaces, canteens, and markets. Divided into nine categories: food: clothing, daily necessities, cultural and entertainment supplies, books and magazines, medicine and medical supplies, housing and building materials, fuel, and other commodities. It is included whether it is for personal use or as a gift to relatives and friends.

Net income of rural households

Refers to the total income of rural resident households, after deducting production and non-productive operating expenses, paying taxes, and submitting collective contract tasks, it can be used directly for productive and non-productive construction investment, living consumption, and That part of the savings. It is a comprehensive main indicator reflecting the actual income level of farmers' families.

Net income of peasant households includes both productive and non-productive operating income, as well as non-operating income derived from the repatriation of foreign people, state financial relief, and various subsidies; it includes both monetary income and self-employed income. Income in kind for personal use. But it does not include borrowing income such as borrowing from banks, credit unions and relatives and friends.

Half of the labor force of rural households

Refers to members of rural resident households who have the ability to work and often participate in actual labor. It is one of the basic factors of production and it is an important source for developing production to increase farmers' income. According to regulations, rural males are 18 to 50 years old, females are 18 to 45 years old are full labor; males are 16 to 17 years old, 51 to 60 years old, and females are 16 to 17 years old, and 46 to 55 years old are half labors. The entire labor force of peasant families includes both the labor force of men and women who have the ability to work within the prescribed working age and beyond the working age and often participate in actual labor; it also includes the labor force belonging to workers among the permanent residents of farmers' families. It does not include persons who have become incapacitated within their working age.

Household consumption expenditure of rural households

Refers to the total expenditures of rural resident households for daily living during the year. It is an important indicator used to reflect and study the actual living consumption level of peasant families. Farmers household consumption expenditures include the two major components of expenditures on food, clothing, living, cooking, and other consumer goods, as well as cultural and living services.

Consumption Expenditure on Commodity Life of Rural Households

Refers to the total daily consumption of rural residents' households using their monetary income to buy food, clothing, household furniture, household goods, fuels, durable consumer goods, and cultural, educational, and health products in the market. Including all consumer goods purchased from state-owned stores, collective stores and bazaar trade markets and other distribution channels. Farmers household commodity consumption expenditure is an important component of farmers household consumption expenditure. It is used to reflect and analyze the degree of commodification of farmers household consumption level and its important indicator from the self-sufficient economy to the commodity economy. It is also an important basis for researching and forecasting farmers' demand for consumer goods in the market and formulating a commodity supply plan.

National Urban and Rural Savings Deposit Balance

National urban and rural savings deposits include urban residents 'savings deposits and farmers' individual savings deposits. It does not include the cash held by residents and deposits from industrial and mining enterprises, the army, government organizations and other groups. The balance of savings deposits refers to the time points (the balance of the number of deposits minus the amount of withdrawals) deposited by banks and rural credit cooperatives, such as the amount at the end of the month, the end of the quarter, or the end of the year.