Standard of living refers to the level of wealth, comfort, necessities, and material goods available to a particular geographic area. It is closely related to (and often used interchangeably with) quality of life, which is generally understood to include the same measures of prosperity as standard of living, but also incorporates physical and mental health and wellness. Because standard of living and quality of life are broad and slightly ambiguous terms, no universally agreed-upon technique exists for measuring them. So, statisticians invent all manner of interesting equations, systems, and surveys that attempt the unlikely task of boiling down quality of life (or on rarer occasions, standard of living) into a simple number.
The Quality of Life index
One of the most comprehensive equations is Numbeo's Quality of Life Index, which measures eight indices:
- purchasing power (including rent)
- safety
- health care
- cost of living
- property price to income ratio
- traffic commute time
- pollution
- climate.
Purchasing power, cost of living, and property price to income ratio are measures of the average citizen's financial wherewithal in a country, which connects directly to the standard of living. Traffic commute time is self-explanatory but vital (as any commuter will testify).
The safety index covers concerns about robberies, car theft, and other crimes, as well as the prevalence of drugs, property crime, violent crimes, and corruption and bribery. The health care index estimates the overall quality of the health care system, starting with costs to the patient and moving on to quality of care, equipment, doctors, and staff. The pollution index estimates the overall pollution in the country. Air pollution is given the greatest weight, followed by water pollution and access to clean water. The climate index is the climate likability of a given country. Countries with a climate index of 100 have moderate temperatures, low humidity, and no significant weather events or conditions. Here is the ordered list of countries based on these indices.
Top 10 Countries* with the Highest Quality of Life, mid-2023 - Numbeo
*The full data for each list can be seen in the table further down this page. Clearly, Northern Europe is home to some very satisfied people. However, the Numbeo equation is far from the only one used to measure quality of life.
Top 10 Countries with the Highest Quality of Life - U.S. News Best Countries Report 2023
The U.S. News and World Report's annual "Best Countries Report", assembled in partnership with the BAV Group and The Wharton School of the University of Pennsylvania, uses detailed surveys to track a similar, but different set of indicators. These include affordability, safety, the job market, level of income equality, economic and political stability, and the quality of public education and health systems. The Numbeo and the U.S. News lists include many of the same countries, but because of differences in either the survey questions or the methodologies, the countries are ordered differently on the two lists.
Top 10 Countries with Highest Human Development Index, 2021/2022 Report - United Nations
Despite its more academic name, the United Nations' Human Development Index (HDI) tracks many of the same factors as do Numbeo and the U.S. News to measure quality of life or standard of living. However, while most of the surveys on this page are based upon exactly that—surveys—the HDI is based more on empirical data, such as life expectancy, years of schooling, and GNI per capita. Nonetheless, many of the same countries appear in the top 10.
FAQs
Standard of living is the material well being of the average person in a given population. It is typically measured using gross domestic product (GDP) per capita.
What is the standard of living in short answer? ›
Standard of living refers to the level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.
What country has the best standard of living? ›
Sweden is the No. 1 country for affordability, safety and overall quality of life. U.S. News and World Report recently released its ranking of the best countries in the world based on quality of life.
How do you compare the standard of living of one country to another? ›
Per capita output is a more meaningful measure for comparing the standard of living of different countries. Moreover, by examining per capita output over time, economists also are better able to evaluate changes in living standards without the influence of changes in population growth.
What is the US standard of living? ›
In Q4 2022, the real gross domestic product per capita was $78,347. Gross domestic product (GDP) per capita is a commonly used measure for the standard of living.
What country has a low standard of living? ›
The world has enough wealth and resources to ensure that the entire human race enjoys a decent standard of living. Yet, people in countries like Burundi, South Sudan and the Central African Republic continue to live in desperate poverty.
How to compare standard of living between countries? ›
So, if we are trying to compare standards of living across countries, we need to divide GDP by population.
What does it mean when you talk about a country's standard of living? ›
The standard of living is a term used to describe the level of income, necessities, luxury, and other goods and services that are generally readily available to a designated population.
How to improve a country's standard of living? ›
- Invest in technology, human capital, and physical capital.
- Provide incentives of a market-oriented economic context.
- Work to reduce government economic controls on market activities.
- Deregulate the banking and financial sector.
- Reduce protectionist policies.
These Are the 10 Cheapest Countries to Move to If You're Ready to Leave the U.S.
- Costa Rica. ...
- Mexico. ...
- Panama. ...
- Vietnam. ...
- Malaysia. ...
- Thailand. ...
- Greece. ...
- Ecuador. You'll spend just $600 for a comfortable apartment in Ecuador, where you'll also get to use the U.S. dollar.
- Iceland. Iceland is known as the safest country in the world. ...
- Denmark. Denmark is the second safest country in the world in 2024. ...
- Ireland. Ireland became a lot more peaceful in 2021. ...
- New Zealand. New Zealand is really safe, it's the fourth safest place in the world. ...
- Austria. ...
- Singapore. ...
- Portugal. ...
- Slovenia.
According to their findings, the top five countries were Denmark, Sweden, Canada, Australia, and New Zealand. In 2023, global happiness saw a notable increase, rising 6 points from the previous year and 10 points from 2020, with 73% of respondents reporting increased happiness.
How do you determine a country's standard of living? ›
How the Standard of Living Is Measured. The generally accepted measure of the standard of living is GDP per capita. 2 This is a nation's gross domestic product divided by its population. The GDP is the total output of goods and services produced in a year by everyone within the country's borders.
What is the main reason for the difference in living standards between countries? ›
Different countries have different standards of living because they have different employment rates. When a country has a high employment rate, the country's poverty rate declines, and the living standards increase.
What is a normal standard of living? ›
April 2022) The standard of living varies between individuals depending on different aspects of life. The standard of living consists of the individuals having the basics such as food, shelter, social safety and interaction, which all contribute to their wellbeing and what is considered to be a decent living standard.
What is the average standard of living in the world? ›
Based on the research, the UNDP determined that the average standard of living value for the world was 0.731 (out of 1.00). Ninety-two countries ranked higher than this average, including the US, which scored 0.920.
Is USA a livable country? ›
The United States performs well in many dimensions of well-being relative to other countries in the Better Life Index. The United States outperforms the average in income, jobs, education, environmental quality, social connections and life satisfaction.
What are the standard quality of life? ›
Standard indicators of the quality of life include wealth, employment, the environment, physical and mental health, education, recreation and leisure time, social belonging, religious beliefs, safety, security and freedom.
