Measures of levels of consumption in various countries are useful not only as means of comparing the utilization of goods and services in the countries concerned but also as partial indicators of the relative levels of welfare and of production in those countries. These indicators are particularly useful in international economic relations for determining contributions to mutual defence, and to the various United Nations organizations. Although the usefulness of these measures is recognized, agreement as to the best method of obtaining these measures has not been reached.
Canada and the United States were chosen for this methodological study of international levels of consumption because of the similarity of modes of living, institutions, economic systems, age and sex distributions of the population, sizes of family, and habits of consumption in the two countries. In addition the author is familiar with both countries and most of the necessary data were available. The study was confined to the period 1947 to 1950 because a series of years is more reliable for purposes of comparison than a single year in this post-war period, and because data for more recent years were not available when the methodology was tested.
A comparison of per capita national and personal incomes in Canada and the United States during the period indicated that Canadian incomes were approximately 66 per cent of American incomes. Average family incomes in the two countries were in about the same relationship; the average Canadian family received $2,233 and the average American family $3,187 in 1948. What, then, was the relative level of consumption in the two countries?