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Comparing The Cost Of Living In Different Countries: Which Country Delivers Cost Effective Living Standards

By Arshiya Chaudhary

All of us have this desire of living in an urban developed city that is well reputed for its living standards. Every government, for the sake of the people, would do their best to maintain an achievable cost of living as the years go by. However, as days pass by the cost of living standards and maintenance standards keep on increasing and with time it gets difficult for the middle-income class to keep up with the ever-soaring prices. The households are facing the problem of paying higher prices for necessary items like food, clothes, electricity, gas, water, and transport. Many households feel that the prices of these commodities are rising faster day by day. The living cost of the community is escalating because the prices of basic products are sky-scraping. However, the cost of living varies in underdeveloped, developing, and developed countries



Underdeveloped countries are also known as third world countries. Third world countries generally tend to have economies dependent on the developed countries and are normally characterized as poor with ineffective governments and having high fertility rates, high gender-related illiteracy, and prone to diseases. They are those countries in which the rate of capital formation, labour productivity,and the living standards of people are low. There are unused natural resources and unexploited human potential. Underdeveloped African countries like Chad, Burundi, Sierra Leone, Liberia and Asian countries such as Nepal, Bangladesh, and Bhutan are in the slow process of achieving development and are majorly dependent on the agricultural sector which is the backbone of their economy.



Developing countries are also known as second world countries. These are countries that are more stable and developed than third world countries but less stable and developed than first world countries. There can be a coexistence of features of both first world countries and third world countries in these regions. These are countries that have a low standard of living and have a low gross national income per capita even after economic development taking place. They have a high gross domestic product per capita. Countries like Norway, Switzerland, Australia, South American countries, South Africa, Thailand, and Germany fall into this category. 



Developed countries are known as first world countries. Developed countries refer to those countries which have political stability, economic stability, a capitalist regime, and a high standard of living. Various indicators have been used to define first world countries, including GDP, GNP, and literacy rates. These have stable currencies and bustling financial markets, making them attractive to investors and corporations from all around the world. Examples of first world countries include the United States, Canada, Australia, New Zealand, Japan, and Western European countries.




DIFFERENCES IN THESE COUNTRIES IN TERMS OF COST OF LIVING: 


The most prominent reason is the division between rich (developed) countries and poor (developing) countries. All types of countries have seen growing gaps between rich and poor. High inequality slows economic growth and slows social mobility. These widening divisions threaten the stability of our societies and hold back the consensus of meeting common challenges. While developing countries have made impressive efforts in reducing poverty in recent years, many have also seen a rise in income inequality. This behavior encourages the gap between the rich and poor to widen with time which leaves a huge psychological impact on the lower-income class. 

Let’s take India as an example for comparison. India falls into the bracket of a developing nation.


If we are comparing the living standards of India with a developed country like the USA, that means the cost of living in the United States would be 200 times that of the cost of living in India. That means, living in the United States would be 200 times more expensive than living in India. Why? Because there is better availability of facilities in terms of education, healthcare, living standards, transport etc in the United States than in India.

Similarly, let’s compare India’s living standards with Australia. Australia falls into the bracket of a developed nation. If we compare the living standards of India with a developing country like Australia, that means the cost of living in Australia would be 185 times of the cost of living in India. That means, living in Australia will be 185 times more expensive than living in India. Why? Because there is better availability of facilities in terms of education, healthcare, living standards, transport etc in Australia than in India.



CONCLUSION


The cost of living should become a major policy consideration with the goal of keeping it as low as possible for all income groups. The main objective of economic policy of a country should be the improvement of the welfare of its citizens and residents. No matter what kind of economic society one visualizes, the issues of investment of capital and labor resources, as well as innovation, are of extreme importance. The living standards and cost of living vary from city to city, no matter which economic bracket the country is falling into. Underdeveloped and developing countries are undergoing globalization and industrial development which will lead to the creation of ample economic opportunities in these respective regions.


We, as a society should not look down upon the lower-income class group or the regions which are struggling to attain better standards of living. From an individual person’s perspective, it leaves people struggling to pay for the essentials in their daily lives. Therefore, they will be under higher pressure of earning money and take higher risks of suffering from societal related standards. From society’s perspective, the gap between the poor and the rich will be widened. Wealthy inhabitants may still have money to deal with a high cost of living, whereas the poorer ones have to work harder to make their ends meet.


An affordable living standard can be best achieved by providing for greater regulatory flexibility for small enterprises and rolling back labor regulations such as extra disability insurance, occupational licensing, and state minimum wages. Instead of investing money and manpower in producing high-end merchandises, companies should concentrate on mid-range or budget products, which suit the financial capability of customers. These steps can help ensure that there is no sudden increase of living costs related to our daily services which can help in maintaining a safe and healthy standard of living for everyone.


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