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UK POVERTY 

GCSE ECONOMICS: UNIT 12

Measurement of standards of living

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SECTION 2UK POVERTY  Introdution UK Povert!"""

 The 2nd  Section of Unit 12 covers UKPoverty

 This section focuses on;

- the disparities di!erences" in#ivin$ standards

- the ethica# issues that arise fro%the i%p#ications of choice for societ&

 The focus is on Poverty in the UKover the past 5 years

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SECTION 2UK POVERTY  Toda! !ou #ill"""

Identif& ho' 'e %easure

standards of #ivin$

E(p#ain the di!erent

%easure%ents of standards of#ivin$

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SECTION 2UK POVERTY  Standards of living"""

So%eone 'ho has a poor standard ofliving 'i## tend to )e c#assed as livingin poverty and vice versa

Standards of #ivin$ refer to how wello an individua#* $roup or countr& is ata point in time

Measuring standards of #ivin$ a##o' usas econo%ists to co%pare individua#s*$roups and counties 'ith each otherno' and over a period of ti%e

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SECTION 2UK POVERTY  Standards of living"""

+ho do &ou thin, has thehi$hest standard of #ivin$

in1. The C#ass

2. The /in$0s cade%&

. Midd#es)rou$h3. The U/ 

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SECTION 2UK POVERTY  $o# #e measure it%

T&ere is no one measure of standards ofliving' &o#ever in t&e UK #e often use t&efollo#ing(

)*P +er a+ita&ouse&old inome and #ealt&

,evel of eduation

Standard of &ealt&"

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Real GDP per capita

." /&at does )*P stand for0

 1" )*P stands for )ross *omesti Produt

." /&at does )*P measure0

 1" Real )*P measures t&e total amount of goods and servies +rodued int&e UK adusted for inflation

So #&at is Real )*P +er a+ita3"0

Per a+ita means +er &ead 4+er +erson5

T&erefore Real )*P +er a+ita measures t&e total amount of goods andservies +rodued +er +erson adusted for inflation

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Real GDP per capita

)*P +er a+ita adds u+ all t&e goods and servies +rodued in t&e UK and divides it 6! t&enum6er of +eo+le in t&e +o+ulation

If )*P +er a+ita inreases t&en t&e UK +o+ulation is said to &ave a &ig&er standard ofliving

." /&at mig&t 6e t&e limitations of using )*P +er a+ita to measure living standards in t&eUK0

 1" 7 National )*P &ides regional variations 4i"e" ,ondon versus t&e Nort&East5

  7 )*P &ides t&e une8ual distri6ution of inome and #ealt& aross t&e UK +o+ulation

  7 Rising )*P ma! ome at t&e ost of t&e environment 4more +ollution ould mean

+oorer living standards e"g" Middles6roug& smog%05  7 )*P +er a+ita fails to ta9e into aount differenes in t&e ost of living 6et#een

regions

  7 Rising )*P ould 6e t&e result of t&e #or9ing +o+ulation #or9ing longer &oursgiving u+ more and more of t&eir leisure time

  7 $ides t&e :la9 Eonom! and voluntar! #or9 

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Household income & wealth

,iving standards an also 6e measured 6! loo9ing at &ouse&old inome and #ealt&

Man! eonomists argue t&at gro#t& in median &ouse&old inomes +rovidesa 6etter measure of &o# t&e standard of living &as &anged over time

T&e median &ouse&old inome is t&e inome of #&at #ould 6e t&e middle&ouse&old' if all &ouse&olds in t&e UK #ere sorted in a list from +oorest tori&est

•  1s it re+resents t&e middle of t&e inomedistri6ution' t&e median &ouse&oldinome +rovides a good indiation of t&estandard of living of t&e ;t!+ial<&ouse&old in terms of inome"

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Household income & wealth

It follo#s t&at &ig&er &ouse&old inome and #ealt& #ill mean &ig&er standards of living 6eause individuals and families #ill 6e to afford t&e goods and servies deemed neessar! foran ae+ta6le standard of living

T&e =ose+& Ro#ntree >oundation &ave identified a minimum inome standard 4MIS5

re8uired to afford a minimum soiall! ae+ta6le standard of living 4lin9 5

 1s #it& +revious measures of living standards' using averages an 6e deeiving e"g" ost ofliving differenes 6et#een ,ondon and Middles6roug& #ill mean t&at t&e inome re8uired to&ave an ade8uate standard of living #ill 6e different in t&e t#o areas

 1not&er issue is t&at some +eo+le ma! reeive 6enefits in 9ind"

>or e?am+le t&ose on means tested 6enefits often reeive +resri+tionsand dentist visits for free( t&erefore' t&eir living standards are 6etter t&ant&eir atual inome ma! suggest"

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Education & Health

 1 +erson@s standard of living an also 6e defined 6! t&eir level of eduation and &ealt&' or t&eiraess t&ese 6asi servies

." $o# does a +erson@s level of &ealt& andeduation affet t&eir standard of living t&oug&0

 1" /it& greater 8ualifiations and im+roved &ealt&an individual &as a greater earning +otential( andt&erefore is a6le to afford t&e goods and serviesre8uired to a&ieve a &ig& standard of living

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SECTION 2UK POVERTY 

Measuring ,iving Standards-General Problems

Man! indies are averages for t&e #&ole +o+ulation of a ountr!" T&ismeans t&at indies do not al#a!s reveal su6stantial ine8ualities 6et#een different segments of soiet!" >or e?am+le' a +ortion of t&e+o+ulation of t&e UK ould 6e living 6elo# t&e +overt! line"

In t&e data used in indies ould 6e out of date or &ard to ollet"Some ountries do not #is& to &ave ertain inde? data olleted 7 fore?am+le' man! ountries do not +u6lis& statistis a6out t&e num6erof immigrants and migrants"

)*P +er a+ita and &ouse&old inomes ma! 6ot& 6e rising 6ut if t&eost of living inreases at a greater rate t&en standards of living ouldfall Aindeed #&ilst eonomi gro#t& and inomes &ave slo#l! risen't&e &ig& rates of inflation &ave s8ueeBed 6udgets%

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SECTION 2UK POVERTY 

Measuring ,iving Standards-Over to you

*is+osa6le inomes an 6e used as onemeasure of living standards

O+en and om+lete t&e Standards of living@from t&e student s&ared area