Abstract
The prime objective of this study was to analyze the Economic, Social and Environmental factors that affected the overall standard of living (SOL) in Pakistan and Bangladesh. The study used the bound testing approach to co-integration ARDL for analyzing the relationship between the variables. Also, a straight forward relatively simple formula was used to work out the growth rate of the standard of living of Pakistan and Bangladesh. The result showed a positive relationship between gross domestic product and real per capita income in both countries, while consumer price index and population have negative and significant impact on real per capita income in Pakistan and Bangladesh. Political rights and carbon dioxide emission per capita have significant impact in Pakistan, but insignificant impact on real per capita income in Bangladesh. This study has also determined standard of living growth rate of different government’s regimes in Pakistan during 1980 to 2012 and found that Pervez Musharraf regime was the best regime as far as the growth rate of the SOL is concerned which was noted to be 2.07% (Table 3). In the light of our findings it is appropriate to suggest that the governments should formulate and implement policies to combat inflation in both countries. The governments should use suitable fiscal and monetary policies to increase GDP growth rate and discourage setting up of pollution intensive industries for cleaner environment. Political freedom and minorities’ rights should also be given to minorities. Furthermore, provision of leisure, safety of life and property, political freedom, freedom of speech and media, cleaner environment and the like are to be ensured because they are part of the SOL.