A tutor version of a worksheet that gets students to compare 4 countries to see whether the level of gdp adequately reflects the standard of living of an economy.

Worksheet on GDP and Standard of Living (Tutor Version)

There are various projects on inequality and living standards that students could do with the help of Internet resources. Possible titles may include (click on the link after the title for a worksheet and guidance on that title) :-

1. Does the level of GDP of an economy measure its living standards?
   • (GDP / living standards worksheet)
   • (GDP / living standards - tutor version)
2. Is the level of inequality in the world increasing?
3. Does country x offer a better quality of life than country y?
4. What factors determine the rate of growth of an economy?
5. Does a high level of government expenditure lead to a higher standard of living?
6. Has the standard of living in the UK increased or decreased in the last x years?

 

GDP / Living Standards Worksheet - STUDENT

To see whether the level of GDP adequately reflects the standard of living of an economy, we are going to compare 4 countries. We will look first at four developed countries, and see what factors other than GDP may affect their quality of life. Work through the following steps to gather the information:-

 

Step 1 - What is meant by standard of living?

The table below has a number of variables that will affect the Standard of living of an economy. Put a tick in the box that you think is most appropriate for each variable to give the economy a higher standard of living. e.g. if you think a low literacy rate will lead to a higher standard of living, then tick "low level required" under literacy rates.

		High level required	Low level required
GDP
Health	Infant mortality
	Life expectancy
Education	Literacy levels
Unemployment
Transport	Transport expenditure
	Transport infrastructure
Defence expenditure
Electricity consumption
Communications	No. of telephones per person

In some cases there is not an absolutely correct answer. Where this may be the case, write briefly why you have selected the alternative you have. Check your answers to this with your teacher, and when you are satisfied what factors may affect the standard of living and why, go on to Step 2.

 

Step 2 Gathering the information

We now need to be able to compare the countries. The countries to be compared are Australia, UK, USA and Japan. From the Internet sources given below the table, try to fill in all the relevant figures:-

		Australia	UK	USA	Japan
GDP *
Health @	Infant mortality
	Life expectancy
Education @	Literacy levels
Unemployment @
Transport *	Transport expenditure
	Transport Infrastructure
Defence expenditure @
Electricity consumption @
Communications @	No. of telephones per 1000 people

* Available from Bized - Bized Penn world data tables (http://www.bized.co.uk/dataserv/penndata/pennhome.htm)
@ Available from the CIA world factbook (http://www.odci.gov/cia/publications/factbook/index.html)

Hint: Not all the data will necessarily be in exactly the form you want it, so think carefully what you may need. e.g. the World fact book will give the total number of telephones in a country, so to get the no. of telephones per 1000 people, you will also need to collect the population figures for each country. Check also that the data is consistent between countries.

Once you have all the data, go on to Step 3 -

 

Step 3 Comparing the information.

There are various ways to compare the above information. Put the following techniques in the order you think would be most appropriate, with no.1 as the best and no.5 as the worst.

Technique	Order	Reason
Looking at the figures
Creating a standard of living index
Graphing the results
Giving each figure a "score"
Creating a weighted standard of living index

You can also use the Index Numbers worksheet to help explain a standard of living index - there is both a Tutor version (http://www.bized.co.uk/learn/economics/macro/indnos/tutor.htm) and Student worksheet (http://www.bized.co.uk/learn/economics/macro/indnos/student.htm).

If you are not sure what any of these mean - check with your teacher first. Now onto Step 4 -

 

Step 4 Ordering the countries by standard of living.

Carry out whichever technique you chose in Step 3, and fill in the table below.

Country	Ranking by GDP level	Ranking by Standrad of living level
Australia
UK
USA
Japan

Was the ranking very different? If it was, what factors were the most important in changing it?

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

 

Step 5 Other factors affecting standard of living

From the same Internet sources, what other information is available that may be useful in analysing the standard of living of an economy?

__________________________________________________________________________________

__________________________________________________________________________________

The World Bank Social Indicators of Development (http://www.ciesin.org/lqi-is/tabledata.html) has many more variables available. Click on the link, and fill in on the table below other figures to add to your Standard of Living measure.

Country	Variable	Figure	Good/bad??
Australia
UK
USA
Japan

 

Step 6 Comparison with other Standard of Living measures.

In the Penn World Data Tables (http://www.bized.co.uk/dataserv/penndata/pennhome.htm) on Bized, there is another Standard of Living measure. Fill this in in the table below, and compare it with your own rankings.

Country	Ranking by GDP level	Ranking by your Standrad of living measure	Ranking by Bized / Penn Standrad of living measure
Australia
UK
USA
Japan

The Penn world data table measure of Standard of living is calculated by taking the level of consumption expenditure, adding the level of government consumption (less military expenditure). Why might this not be a good measure of standard of living in:-

the short-term ________________________________________________________?

or the long-term ______________________________________________________ ?

 

Step 7 Comparing different countries.

Now try the same exercise as above, but for different countries. Remeber the key sources of information here are:-

Bized Penn world data tables (http://www.bized.co.uk/dataserv/penndata/pennhome.htm)
CIA world factbook (http://www.odci.gov/cia/publications/95fact/index.html)
World Bank Social Indicators of Development (http://www.ciesin.org/lqi-is/tabledata.html)

 

GDP / Living Standards Worksheet - TUTOR VERSION

 

Step 1 - What is meant by standard of living?

* This step is to get students to think about what variables may be useful in assessing the Standard of living. Some suggested answers are given below. It could also be used as a basis for discussion.

		High level required	Low level required
GDP		High
Health	Infant mortality		Low
	Life expectancy	High
Education	Literacy levels	High
Unemployment			Low
Transport	Transport expenditure	High - but externalities?
	Transport infrastructure	High for efficiency
Defence expenditure			Low (but international security?)
Electricity consumption		High - but externalities?	Energy efficiency important
Communications	No. of telephones per person	High - good communications

 

Step 2 Gathering the information

Their answers to this section will depend on the years they choose. Penn World Data and the CIA factbook have data for varying years, and so this may need to be stressed to students. For the number of telephones per 1000, students ill also need to collect the population figure.

		Australia	UK	USA	Japan
GDP *
Health @	Infant mortality
	Life expectancy
Education @	Literacy levels
Unemployment @
Transport *	Transport expenditure
	Transport infrastructure
Defence expenditure @
Electricity consumption @
Communications @	No. of telephones per 1000 people

* Available from Bized - the Penn World Data Tables (http://www.bized.co.uk/dataserv/penndata/pennhome.htm)
@ Available from the CIA world factbook (http://www.odci.gov/cia/publications/factbook/index.html)

 

Step 3 Comparing the information.

Students may need these techniques explaining, particularly what is meant by an index and what the concept of 'weighting' is. Suggested answers are below:-

Technique	Order	Reason
Looking at the figures	5	Very difficult to judge accurately
Creating a standard of living index	2	Good technique, but without weighting, all factors will be considered equally important
Graphing the results	4	Better than just looking at figures, but again - a large amount of information to take in.
Giving each figure a "score"	3	Good technique, but very prone to subjectivity
Creating a weighted standard of living index	1	The best technique - weights can be adjusted to reflect the importance of each variable in the standard of living of a country.

 

Step 4 Ordering the countries by standard of living.

The technique chosen here may have to be chosen by the teacher, to ensure that the task is accessible to students. Students at an early stage of the course could simply 'score' or `graph' the data to interpret it, while more advanced students could perhaps try to form an index (depending on their mathematical ability).

Country	Ranking by GDP level	Ranking by Standrad of living level
Australia
UK
USA
Japan

Was the ranking very different? If it was, what factors were the most important in changing it?

This question is to try to get them to look closely at the figures to see which of the variables differ for each country. Are there significant differences or would GDP per head have been an adequate measure?

 

Step 5 Other factors affecting standard of living

From the same Internet sources, what other information is available that may be useful in analysing the standard of living of an economy?

The CIA world factbook also has information on environmental problems which the countries face, and this should promote some discussion as to which aspects of the environment could be quantified to measure SOL. It also has information on the breakdown of industry in each country, and students could consider which industries may contribute more or less to 'quality of life'.

This table should be filled in from the World Bank Social Indicators of Development (http://www.ciesin.org/lqi-is/tabledata.html). This database includes a substantial number of variablesthat pupils could select to add to a standard of living index. They include (among many others):-

• Access to helath care
• Access to safe water
• Agriculture as a percentage of GDP
• Child malnutrition
• De-forestation rate
• Expenditure on social security
• Food aid
• Households with electricity
• Poverty line
• Maternal mortality
• Teacher ratios (number per 1000 etc.)

Students could perhpas be guided to choose the 3 or 4 they felt were most appropriate, and fill in the table below with several variables.

Country	Variable	Figure	Good/bad??
Australia
UK
USA
Japan

 

Step 6 Comparison with other Standard of Living measures.

This step is to reinforce the fact that there are many different ways of measuring standard of living, and to try to provoke some discussion as to the most appropriate measures.

Country	Ranking by GDP level	Ranking by your Standrad of living measure	Ranking by Bized / Penn Standrad of living measure
Australia
UK
USA
Japan

The Penn world data table measure of Standard of living is calculated by taking the level of consumption expenditure, adding the level of government consumption (less military expenditure). Why might this not be a good measure of standard of living in:-

the short-term

• high consumption expenditure may be on items that do not add to standard of living e.g. natural disasters/wars may lead to higher consumption.
• Higher consumption may lead to higher pollution levels / environmental damage
• Higher consumption may lead to non-renewable resources being used
• Crime levels add to government consumption, but not standards ofliving
• and so on!

or the long-term

• takes no account of the fact tha investment is foregone consumption, and so although current SOL is lower it may be higher in the future
• takes no account of government investment which may increase standards of living by more than private investment
• and so on!

 

Step 7 Comparing different countries.

This section is to try to encourage students to look at a greater variety of countries, that may beat different stages of development. The sources were, as before:-

Bized Penn world data tables (http://www.bized.co.uk/dataserv/penndata/pennhome.htm)
CIA world factbook (http://www.odci.gov/cia/publications/factbook/index.html)
World Bank Social Indicators of Development (http://www.ciesin.org/lqi-is/tabledata.html)