A nation’s standard of living is best measured by its citizens. This means that the country’s economic situation, education system, and health care all contribute to how a person lives their life. In order to measure this accurately, economists use GDP per capita as one indicator for determining the quality of life.
The World Bank uses a variety of factors in its calculations including purchasing power parity (PP), which takes into account local prices on goods and services; or by simply using GDP in U.S. dollars adjusted for PP with other countries on an international scale so it can be compared without taking exchange rates into consideration.
Investopedia defines GDP per capita as “the gross domestic product (GDP) divided by the country’s total population. This calculation provides a rough measure of the average living standards in an economy.”
A nation with higher GDP per capita usually has better health care, education and economic stability for its citizens. One example is Norway where roughly one-third of all taxes go to public services such as healthcare and retirement funds; which means that people are able to enjoy those benefits without having to pay much on their own or through private insurance companies.
Additionally, because there is less pressure from paying medical bills every month, Norwegian citizens have more money left over at the end of each year than Americans who don’t have these safety nets in place.