Comprehending the standard of living in Algeria

Abstract

In today's world, the conflict is between those who have and those who do not. In other words, the gaps in the acquisition and distribution of wealth lead to costs that the entire society must endure. In this context that appear the importance of the themes on the economy of well-being.

The purpose of this work is to provide some explanation of the standard of living in Algeria by facing the problem of the non-existence of a single statistical variable which could represent the phenomenon. For this we first tried to remove the overlap and the illusion on the concept, so we concluded that the of quality of life is the broadest and the most difficult to measure because it is more qualitative, and it includes the standard of living, the latter in turn includes the cost of living. It has been found that standard of living in its general term refers to the quantity and quality of material goods and services available to a given population. It is influenced by different factors, according to the most modern approach, the standard of living is beyond the question of material prosperity or opulence, but also a question of what a person is able to do or to be, it is therefore synonymous with freedom.

The economic situation of the country leads us to three adequate methods of measuring the standard of living (square root scale of the OECD, food expenditure as a proportion of total household expenditure and real GDP per capita) but the availability of data has forced us to choose GDP per capita as a measure of standard of living. This measurement was validated for the case of Algeria after having noted that it is strongly correlated and cointegrated with other immaterial aspects of Algerian life. We have chosen life expectancy and the HDI to represent this immaterial aspect.

The empirical study of the last chapter led to confirm the supposition that the economic and governmental factors which have more impact on the Algerian standard of living. This is due to the heavy presence of the central state in the daily and economic life of Algerians. This means that Sen's vision is validated for the Algerian case due to the fact that the population is condemned by the series of abusive (and sometimes unjustifiable) laws which condemn economic freedom and restrict the solutions available to households to improve their standard of living by themselves. This is confirmed by the continuing increase in the size of the informal economy as the only escape from state restrictions.

The results of our empirical study are strongly linked to the reliability of the databases used, especially as the country suffers from less reliable and incomplete statistics. This is why we find that it is recommended to conduct this kind of study on the basis of data from field surveys carried out by the researcher himself in order to be able to collect and control all the necessary data. Especially since the equivalence scales of the OECD and Engel will harmonize perfectly with such a method.