Affordable

Affordability is an adjective describing the degree to which a good, service, or policy is within the purchasing power of individuals or households. Something is affordable if people can pay for it without excessive financial hardship. The term is relative to income, prices, and credit availability, and its evaluation varies across contexts and over time.

In economics and public policy, affordability is often assessed by comparing price to income or by a spending threshold. A common housing standard, for example, is that housing costs should not exceed about 30% of gross income. Affordability can also apply to healthcare, education, energy, and other essential goods and services, where price levels or access terms affect participation and welfare.

Affordability is not the same as cheapness; an item can be affordable for some and not for others depending on income and debt, and vice versa. It can be influenced by financing conditions, subsidies, taxes, and macroeconomic factors such as inflation and interest rates.

Common areas discussed include affordable housing, affordable healthcare, education, energy, and consumer goods. Public programs may aim to improve affordability through subsidies, price controls, wage or income support, or targeted assistance, though implementation and outcomes vary widely by country and market conditions.

Measurement and debate: Analysts use price-to-income ratios, expenditure shares, and affordability indices. These metrics are sensitive to local conditions, financing terms, and policy changes, and they can obscure distributional differences within a population.