It is based on the overall cost of a fixed basket of goods and services bought by a typical consumer, relative to price of the same basket in some base year.
By including a broad range of thousands of goods and services with the fixed basket, the CPI can obtain an accurate estimate of the cost of living.
Consumer price index:
Indonesia - 51.42
Thailand- 50.16
As consumer price index can be used to estimate cost of living, comparison between CPI of Thailand and Indonesia will tell us that Indonesians have a higher cost of living as it has a higher CPI.
This tells us that Indonesians have a (slightly) lower standard of living. With a higher cost of living, Indonesians enjoy less material goods and perhaps necessities than Thais due to the cost of goods. Therefore, Indonesians have a lower standard of living than Thais in the material aspect.
* standard of living: The level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area.
VERDICT: THAILAND>INDONESIA
http://www.sparknotes.com/economics/macro/measuring1/section2.rhtml
http://www.numbeo.com/cost-of-living/rankings_by_country.jsp
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