This paper develops a new methodology to compute social cost of living indices. These indices
indicate whether or not price changes have a favourable (or unfavourable) impact on the
welfare of the poor. The indices are derived on the basis of two alternative classes of social
welfare functions. The methodology developed in the paper is applied to compute social cost
of living indices for Thailand and Korea. The empirical results show that changes in prices have
generally affected the poor more adversely than the non-poor.