Luxembourg households had the highest level of material welfare in 2023, based on a benchmark produced by Eurostat, the EU’s statistics bureau.

The benchmark, called actual individual consumption per capita, showed that Luxembourg households were collectively 36% better off than the EU average.

The top three countries were rounded out by the Netherlands and Germany, which were both 19% above the EU average. The lowest levels of AIC per capita were recorded in Latvia (26% below the EU average) and in Hungary and Bulgaria (both 30%). The were published last month.

Actual individual consumption is “a measure of material welfare of households,” and “refers to all goods and services actually consumed by households,” including those provided by not-for-profit and government organisations, according to Eurostat. “Although GDP per capita is an important and widely used indicator of countries’ level of economic welfare, consumption per capita may be more useful for comparing the relative welfare of consumers across various countries.”

The use of GDP per capita can paint a distorted picture of Luxembourg’s economy because of the large number of cross-border commuters, who contribute economically to the grand duchy (the ‘domestic product’ in gross domestic product) but are not residents of the country (the ‘per capita’ bit).

Actual individual consumption, Eurostat explained, “is expressed in purchasing power standards,” a method to account for the differences in the values of currencies. “Theoretically, one PPS can buy the same amount of goods and services in each country.”