Consumption affluence Vs human development services deprivation

Sometime back I had written about the changing middle class consumption profile - "as economies develop and incomes grow beyond subsistence requirements, a new set of necessities—education, healthcare, housing, and energy—are taking an increasing share of people’s incomes". But the rising cost of these human development services was creating a new type of deprivation among them.

Now the Times has an excellent graphic that captures why people are enjoying "consumption affluence", fuelled largely by technological progress and cheap imports, while feeling deprived on these new non-tradeable service necessities, which largely determines the human development trajectory.

Unfortunately, inadequate access to these services, which are critical to future life outcomes, hurts the poor - and even the middle class in developing countries - very badly. And the widening inequality is only amplifying these effects.  

Comparing living standards across generations

It is well acknowledged that as we move along the aspiration treadmill, goods and services previously considered "luxuries" become "necessities". Economix points to the findings from a Pew Research Center survey, whose findings are shown below.




Part of the reason for this transformation in attitudes has been the steep drop in prices of many technology related consumer electronics products.



As Economix says, these developments have generated a debate about how inter-generational living standards should be compared. One group attributes greater weightage to these changes and says living standards have improved, while otheres claim that the gains in these have been offset by faster rising costs of health care etc.