CHAPTER 1 
MEASURING THE COST OF LIVING 
HE problem of measuring the cost of living has two 
aspects—first, the amount that it actually costs to live, 
and second, the extent to which these costs change from 
time to time or differ from place to place. These two prob- 
lems again present several phases. One is whether the cost 
of living shall be measured from the point of view of expendi- 
tures, that is, what individuals or families actually spend 
regardless of the return in material goods or well being, or 
whether it shall be measured by a purely hypothetical con- 
cept of needs and the money cost of supplying them. 
ExpENDITURES As A MEASURE oF THE Cost oF Living 
From the standpoint of the individual or the family the 
sum spent for those things which are considered to be 
necessary for proper existence, that is, the cost of meeting 
the requirements of the standard of living, is thought of as 
the cost of living. This amount is necessarily limited to a 
considerable extent by available income, although income 
is not necessarily a measure of the cost of living. Expen- 
ditures reflect individual tastes and managerial ability, but 
they also reflect periods of prosperity or depression, with 
their effects on wages and prices. On a given income, some 
families may do very well and others of the same size and 
composition may fare badly; some may be so situated as to 
have a decrease or an increase in income completely alter 
their scale of living; others may adjust themselves with 
neither abnormal loss nor ostentatious gain. Again, regard- 
less of individual taste or managerial ability, expenditures 
among certain groups are perforce affected by changes in 
income, and among all groups they are affected by changes 
in the price levels of the goods and services for which expen- 
ditures are made. Thus. the cost of living, from the point of