Family Economics And Consumer Education 3 (2+1)

Lesson 04 : Family Income

Standard of living

Standards are the specification of values and differ from place to place, person to person, group to group, religion to religion etc. These standards are influenced by the resources and environment. Generally standards and standard of living are cultural products that grow up in group life and are passed from generation to generation. The term standard of living is used both to describe behavior of an individual or a family.
Standard of living refers to the quantity and quality of goods and services used for consumption of the family or individual is accustomed to standard of living is a composite of all the goods and services and the pattern of consuming considered essential by person or a group.
Standard of living can be defined as “It is the satisfaction which we considered essential by an individual or group”-Hoyt, (1938). In this definition, essential means, goods most desired in the sense that, they will be first secured and last given up. Different classes have different standards and each one comes up to look upon certain things as constituting the normal requirement of everyday life. Standard of living is defined as “The aggregate of necessaries, comforts and luxuries to which a class of people has been accustomed”.
A standard of life is formed when wants of an individual or a class to which he belongs are satisfied repeatedly and pass on to habits. Standard of living is the combination of many specific standards. It consists of pattern of commodities, services and satisfaction which a person thinks are essential for her living.
Standard of living determines the character of the real income of the family within the limits set by resources and is a power to which we defer unconsciously in every choice we make.
Standard of living are not uniform or identical. They differ from a class of people to another. Normal requirements of everyday life are considered by people of different classes and they try to achieve those standards and maintain the same or improve upon the same
Standard of life is not rigidly fixed. It varies from one nation to another, from one class to another, from one individual to another, from one period to another with the same individual or class or nation.
Standard of living goes on changing due to the changes in these factors or forces. Hence the standard of living in India is much higher than it was in the pre independence period.
Standard of living of an individual living in urban centers or metropolitan cities like Delhi has profound influence on his personal living style, his daily needs like clothing, food, housing, recreation etc. He would resist any reduction in his wages or income since that would affect his way of life and standard of living.
Standard of living in rural areas is poor. All the evidence collected from different social and economic surveys have confirmed this.
Important factors of Standard of living:
Following are the important factors of standard of living

1. Standard of living depends on the income and habit.
2. It is fixed from the habits and customs point of view. It is flexible from income point of view. As income rises standard of living also rises.
3. People always aspire for a higher standard of living. It is movable upwards but not downwards.
4. A country’s standard of living depends upon the per capita income of its people. A backward country having a low per capita income has a low standard of living.
5. Standard of living affect a person’s efficiency
6. The economic welfare of a community is judged by its Standard of living.

Factors influencing Standard of living
Standard of living is influenced by a host of factors…viz

1. Income: The size of income influences the Standard of living since it determines the buying capacity and the consumption level of the family.
2. Wealth: Accumulated wealth influences the Standard of living as a wealthy man would like to maintain a high Standard of living.
3. Ratio of size of family to size of Income: A small family with a given income can certainly enjoy a better standard of living than a big family with the same income.
4. Price level: Price level determines the real income of the people. A low price level leads to high real income and a person with high real income can have better living standard.
5. Education and individual taste: Differs from person to person and these are powerful sources which determine the standard of living of particular person. An educated person prefers to have a better pattern of consumption as compared to an illiterate one.
6. Religious Dogmas: Religion advocates simple living standard. A religious person or a family believes in simple standard of living.
7. Economic system which a country has also affects the Standard of living of its people. In industrial economy, the standard of living is higher than the agricultural economy of the country.
8. Social environment: The cultural and surroundings of social environment also influence a family’s standard of living. In a posh locality people have a better living standard
9. Income and number of dependents: Standard of living depends upon the income of family and number of dependents. If dependents are few, the standard of living is high.
10. Class of the individual: The class to which individual belong affects standard of living. It is rather different for a family to deviate from the standard set by class to which they belong. Different class have different standard.

Standard of living in India: A vast majority of people in India are poor, ill fed and under nourished. They are deprived of even basic necessities of life on account of object poverty. An average Indian’s consumption level is low. He lacks proper clothing and shelter.
Following reasons are mentioned for the low standard of living in India

• Economic backwardness of the country perpetuated since long has lead to poor standard of living.
• Per capita income of an average Indian is low.
• India’s economy is predominantly agrarian. Agriculture is a way of life rather than a business and agriculture is backward with low productivity.
• Industrial progress is still slow and standard of living improves only with industrial development.
• Capital formation in the country is low due to low savings and low investments.
• Mass of people is illiterate and orthodox. They are religious and conservative. Hence a social reform is slow.
• High rate of population growth at 2-5 per cent per annum retards the Standard of living despite growth of National Income.