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Seminar paper from the year 2007 in the subject Economics - Micro-economics, grade: 1,7, LMU Munich (VWL Lehrstuhl), course: Strategic Factors in the Economic Development of the United States, language: English, abstract: Imagine someone came up to you and asked you: "name three aspects that in your opinion are of great significance to a high standard of living", what would you say? What determines your perspective towards the standard of living? Do you give priority to income and wealth? To personal freedom? Or to health? With regard to our today's society, where most products are being…mehr

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Seminar paper from the year 2007 in the subject Economics - Micro-economics, grade: 1,7, LMU Munich (VWL Lehrstuhl), course: Strategic Factors in the Economic Development of the United States, language: English, abstract: Imagine someone came up to you and asked you: "name three aspects that in your opinion are of great significance to a high standard of living", what would you say? What determines your perspective towards the standard of living? Do you give priority to income and wealth? To personal freedom? Or to health? With regard to our today's society, where most products are being invented in order to make our lives more comfortable, it is interesting how the standard of living can be measured best. The most widely adopted measurement of the material standard of living is GDP per capita adjusted for changes in the price level, called inflation or deflation. Usually, one might guess that through a higher GDP per capita, the income and the personal wealth rises and therefore the standard of living also increases. This nevertheless does not reflect the distribution of income, or the environment that affects health and safety. Moreover, crime, pollution, and congestion - which are for many people negatively correlated with their quality of life - are neither considered. GDP per capita therefore just measures the material standard of living, but a lot of other factors are being ignored. That is the reason why the biological rather than the material standard of living should be contemplated in terms of "measuring" the quality of life. A second possibility to measure the standard of living is the HDI (Human Development Index). It consists of 1/3 GDP per capita, 1/3 life expectancy index, plus 1/3 education index. Here, the standard of living does not solely depend on material assets, but also on life expectancy which contains health and the environment and education. However, important factors for the wellbeing like the political system in the country or human rights are missing. For the first time in the 1970s, height was used as a measurement for the standard of living. At first this might seem strange, because one thinks that height depends above all on genes. This is certainly right, but we are not taking a look at the height of individuals but of whole populations.

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