As the most widely applied index in the field of social development, income per capita has been adopted by many countries and international organizations as an effective index to measure people’s living standards. Although it is true that income per capita has its advantages and rationality in terms of measuring people’s living standards. Nevertheless, it also has many defects. These include that income per capita may not reflect the actual situation accurately and comprehensively. Also, income per capita cannot reflect information beyond the material dimension. Empirical evidence has proved that excessive reliance on income per capita to measure and assess people’s living standards may lead to deviations in the focus of national development policies, resulting in solely numerical growth without an actual improvement of people’s living standards. Therefore, it can be helpful to introduce and use multi-dimensional indices and cross-check between them to correct possible errors of data. And new indices can be used based on actual needs to investigate information beyond the material level. These methods are expected to make up for the deficiencies of simply applying income per capita in measuring people’s living standards, and to achieve a more scientific and comprehensive assessment of people’s living standards.