A high standard of living is determined by factoring a region's gross domestic product (GDP), life expectancy, and income into the amount of wealth, luxury goods, necessities, and comforts available to a certain socioeconomic group. Those who have a high standard of living generally benefit from some form of economic stability, have good health, and enjoy some discretionary income. They do not lack for food, medical care, or shelter.
GDP is the value of all products or services generated by the region or country where the socioeconomic group resides. It is computed by adding the amount of money consumers and government entities spend for the products or services — including capital expenditures made by businesses to purchase factories, tools, and machines — and the difference between the monetary value of exports and imports. A high GDP indicates a healthy economy and high standard of living. Consumer and government spending gives businesses incentive to produce desired goods or services and invest in ways to provide such goods or services more efficiently. A high net export total indicates that the area is self-sufficient and is able to sell excess products abroad.
Life expectancy is the estimated lifespan of a socioeconomic group in a region or country. Lifespans that exceed national or world averages can indicate a high standard of living. Malnutrition and disease are the primary causes of death in impoverished areas. Longer lifespans indicate that food is widely available; citizens have access to vaccines, checkups, and treatments that prevent or combat diseases, and they live in environments that expose them to few pollutants or toxins.
Income is the monetary value of an individual's service to an employer. Socioeconomic groups with incomes that exceed national or world averages tend to have high standards of living. A person's education and the availability of lucrative employment opportunities usually determine income levels.
High-paying jobs are typically reserved for people who are college-educated or have special training or abilities that are in high demand. Higher wages usually allow individuals to afford food, housing in areas with little crime or environmental dangers, healthcare, and advanced schooling for their offspring. Their cost of living is typically lower because they are able to afford more goods and services with their extra income.
Jobs that require little skill or formal education, on the other hand, are low paying. People with lower incomes reside in areas affordable to them due to undesirable characteristics of the environment around them. They also may be malnourished or in poor health because they are unable to buy quality food or see a doctor on a consistent basis. Areas with low-paying jobs generally do not have high standards of living.
A community with a high standard of living enjoys a better quality of life than those living at or below the poverty line. These areas have thriving economies that provide employment opportunities and quality goods or services that satisfy the desires and needs of the individuals residing in the area. They also have a consistent source of food and access to medical care that keep the population healthy and productive. Finally, places with a high standard of living have an educated population that warrant higher wages for their work and allow money to be spent on quality housing, healthcare, education, and nutrition.