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Economics Tuition – Is Singapore’s standard of living really high?

Economics Tuition – Is Singapore’s standard of living really high?

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Many economists and statistical reports from prominent research institutions have ranked Singapore as one of the countries with a higher standard of living as our real Gross Domestic Product has been ranked in the top ten of all nations over the years. However, skeptics are quick to point out that our standard of living may be overrated if we consider the qualitative aspect of living and limitations of the economic indicators of real GDP per capita as a measurement of standard of living. However, the quality of life in Singapore has improved if we conduct a deeper and wider scope of examination.

Economics Tuition - National Income Accounting - Figure 1

As depicted by the Straits Times, our real GDP capita has risen from $1,580 to $71,318 from 1965 to 2014. Critics are quick to point out that standard of living has not improved given that there is high degree of unequal distribution of income and price level and population growth rate had risen tremendously and this may have eroded the real purchasing power on an average basis. To a certain extent, the arguments may be right if we purely assess this from a quantitative basis, given that Gini coefficient is around 0.475 for Singapore and can be an alarming issue as the size of population is small. Prices have been quite high as some may see how non-core inflation has made many feel that the ownership of crucial assets like houses is an impossible dream.

However, if we examine from a wider angle and more holistic way, we do fair better than our parents and grandparents. First, prices may rise for some luxury and high-valued goods but most of the daily necessities affordable as our wage rate has risen for the majority of workers. More families are dining out and the places that they are dining in more posh and sophisticated restaurants, implying that life has become luxurious.

Economics Tuition - National Income Accounting - Figure 2

Second, the social policy of public housing and subsidized education to help the general public has been a great success. For education, our literacy rate is 96.7% as stated by Economics Development Board in 2104 survey (refer to table above) and there are extensive upgrading programmes to help the less-educated individuals to raise their skill level and qualification, thus improving their degree of employability and wage rate. As for public housing, the Housing Development Board (HDB) is proud to claim that public housing is ’Home to over 80% of Singapore’s resident population, and with population is able to afford public housing as such that nearly 90 percent’ and these public houses are also built at an acceptable level of quality admired by many foreigners. Furthermore, the precincts are well supported by amenities like public parks and swimming to create a more relaxed and comfortable environment which will raise the quality of life for Singaporeans.

In general, the country is also well-facilitated with extensive public amenities and well-connected with public transport to make it easy for commuters travel from one part of the country to another part. Telecommunication connectivity is also high where there are 4,608,800 mobile subscribers and the mobile penetration rate is 148%, indicating that Singaporeans do enjoy a high level of standard of living as they enjoy a high level of convenience and comfort.

Last but not least, the country is a safe place to raise a family and enjoy life, given the low crime rate. People do feel safe to stay up late as the street is free from robbery and petty crime with only one unexpected riot in Little India. This indicates a politically safe environment for investment which will promote prosperity, enabling the economy to attain sustainable economic growth to promote higher level of standard of living.

Do we have a high standard of living? Yes, we have but there is always the concern to make sure that this high level of standard of living is enjoyed by all people in Singapore. The task to make Singapore an inclusive society for all is not an easy task but it must be the aspiration that all Singaporeans will want to achieve so that we can make sure that there is high standard of living for all Singaporeans.


This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.

Economics Tuition – Explain the problems of comparing living standards of Singapore over time

Economics Tuition – Explain the problems of comparing living standards of Singapore over time.

In Singapore, the enforcement of a good crime enforcement system has significantly reduced the level of crime rates and illegal activities in Singapore. However, in the past, where the presence of illegal activities/pirated transactions was rampant, it may have otherwise undermined the level of Gross Domestic Product (GDP) and hence living standards by excluding a large portion of the income and activities generated in the underground economy. Hence, there is an overestimation of the improvement in living standards of Singapore.

Furthermore, if the percentage increase in price level or population or both are to rise above the percentage increase in GDP, the percentage increase in real per capita income will not rise, implying that there is no improvement in standard of living (SOL).

The increase in national income may not imply that the SOL of the whole nation has improved since the increase in real per capita due to a rise in GDP may not take into consideration the actual distribution of income. This means that not all the citizens will experience rise in real per capita income, indicating an increase in purchasing power.

It is also important to take note of the composition of production. Even if the GDP increases does contribute to growth in production capacity, the low level of production of welfare good such as does not improve the lives of the people.

Lastly, it is imperative to assess the qualitative aspect of standard of living such as the stress level and level of externalities. Therefore, qualitative indicators like Measurement of Economic Welfare (MEW) or Human Development Index (HDI) will be needed as MEW reflects the monetized value of intangible aspects of SOL, while HDI reflects the progress of well-being of the individuals.


This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.

Economics Tuition – Using the Production Possibility Curve, explain how an increase in government spending contributes to economic growth

Economics Tuition – Using the Production Possibility Curve, explain how an increase in government spending contributes to economic growth

Economic growth refers to the growth of production, seen in terms of actual and potential production capacity. Actual economic growth, also known as short term growth, is commonly measured in terms of a percentage change in the real Gross Domestic Product (GDP). The Production Possibility Curve (PPC) illustrates the resource and production capacity an economy can attain with the given amount of resources and level of technology.

The increase in government expenditure, such as the provision of subsidies to consumers, raises consumption and investment, so as to raise aggregate demand, production and national output. Consequently, production level contributes to an increase in the actualized production of goods and services, thus achieving higher actual economic growth.

Economics Tuition - National Income Accounting and Economic Growth - Diagram

Economics Tuition – National Income Accounting and Economic Growth – Diagram

As seen from the PPC, the increase in government spending contributes to the shift of the production level from point A to point B, thus attaining actual economic growth.


This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.

Economics Tuition – What is standard of living?

Economics Tuition – What is standard of living?

Standard of living refers to the average quality of life of a population that includes the material and non-material aspects of life. The material aspect or quantitative value of SOL is determined by the quantity of goods and services enjoyed by the individual through the value of real per capita income which can be derived from real GDP, whereas the non-material aspect or qualitative aspect of SOL includes things such as life expectancy, crime rates, education standard, etc.


This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.

Economics Tuition – Explain the indicators used in assessing the economic health of a country

Explain the indicators used in assessing the economic health of a country.

The economic health of a country refers to the standard of living (SOL) of a country, which includes the material and non-material aspects.

For the material aspect of SOL, it determines the level of goods and services produced and are available for the consumption by the people and is commonly measured by the value of Gross Domestic Product (GDP) or Gross National Product (GNP). The GDP is an effective indicator for economic performance and standard of living. The derivation of real per capita GDP from the value of GDP after it has discounted for inflation with the GDP deflator and divided by the population figure is the value to represent quantitative standard of living. When there is an increase in value of GDP will mean that the tax revenue the government can collect will be higher and thus provide more funding for government expenditure to improve the infrastructures and facilities to improve the convenience and comfort of lives of the people.

However, there are limitations in using GDP as an indicator of the economic health of a country. The value of GDP may provide assessment of the level of standard of living but it does not help to measure the qualitative aspect of standard of living.

To determine the qualitative aspect of standard of living, the Human Development Index (HDI) is used to determine the degree of progress of the well-being of the citizens. It measures the life expectancy, education index. Also, the Measurement of Economic Welfare (MEW) will determine the value of the qualitative aspects of life in monetary terms.


This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.