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 Any particular social aggregate, farm family or village, has an Sms, a

general consensus as to what is a minimum subsistence standard of living per

person. However, the Sms need not be the same for all social aggregates within

the same nation or geographic area and need not be the same for a given socio-

economic unit through time.

 It is important to note that Sms is different from the traditional notions

of a standard of living as a goal which the individual always strives to reach.

The subsistence standard is a something which the individual strives to avoid

or not drop below. Thus, if we call the traditional standard the "achievement

standard of living," Sas, and the actual level of living per person, L, then

L is usually equal to or above Sms, the minimum subsistence standard, but always

below Sas, the achievement standard of living. Sms in turn is above the physio-

logic minimum, Pm. The relationships can be summarized as:

 Sas > L > Ss 1 P

 A central argument to much of what follows regarding risk is that the sig-

 nificant operative variable with important behavioral implications is not Pm'

 but the relationship of L to the Sms, the minimum subsistence living standard.

 Many economists when talking about subsistence levels of living are usually

 thinking of Pm, the minimum physiologic requirements, which are in fact fairly

 constant from person to person, once account has been taken of age, sex, physical
 1/
 activity, and climate.

 Attention has also tended to focus upon the relationship between actual levels

 and the achievement standard. In our view, however, the relationship between

 actual levels and the minimum subsistence living standard may be even more important



 I/ For an interesting recent critique of these standards from a nutritional
 standpoint see Oshima [1967].