Which principle assesses the increase of living costs and adjusts benefits accordingly?

The principle that assesses the increase of living costs and adjusts benefits accordingly is the cost of living. This principle reflects changes in the expenses required to maintain a certain standard of living, ensuring that benefits, such as pensions or social security, keep pace with inflation and rising prices. By using the cost of living as a basis for adjustments, individuals receiving these benefits are protected from the erosion of purchasing power that can occur during periods of inflation.

The other options suggest related but distinct concepts. The consumer price index is a specific measure used to calculate the cost of living by tracking the prices of a basket of goods over time. Inflation adjustment refers to the broader practice of modifying incomes or benefits to reflect inflation but does not specifically encapsulate the ongoing assessment related directly to living costs. Market value increase pertains more to asset values rather than the general living expenses faced by individuals. Hence, the cost of living is the most appropriate principle for this assessment.