Per Capita Income Calculation Formula

You can also determine the gross national income per capita of a country using a similar formula to the one used to get the gdp per capita.

Per capita income calculation formula. The formula divides the nation s gross domestic product that is the gdp by its number of people in short the total population of the nation. To calculate the gross national income per capita you will use the same information used to calculate the gdp per capita in addition to any income that residents have brought in as a result of foreign investments. Example of calculation of per capita income. Calculate the per capita income by dividing the total income by the population.

In a specified period say during a year usually aiming to determine the average income earned by a person in order to evaluate the standard. To do this it is necessary to figure out how to calculate the average per capita family income where to apply for registration and what documents to prepare. In order for the family to be recognized as low income citizens should prove that the income per family member is less than the subsistence minimum. Formula to calculate per capita income.

Gdp per capita can be said to be a measure of a nation s economic output which shall account for its population that is the count of the person. For example a small town with a population of only 20 people had a total income of 200 000 in 2010. To understand how per capita income is calculated one first needs to understand how income of a country is calculated. In 2006 the united states had a total personal income of usd 11 256 516 000 and had approximately 300 000 000 inhabitants.

Median income is a more accurate reflection of average americans actual incomes because it accounts for income inequality that per capita or average income can hide. When you divide 200 000 by 20 the result is 10 000 in per capita income or 10 000 in income for every man woman and child. Per capita income measures the average income earned per person in a given area city region country etc in a specified year. Per capita income can be described as an economic barometer which measures the income earned by an individual under a given set of economic unit say geographic region i e.

Firstly determine the nominal gdp of the subject country on the basis of its private consumption gross investment government investment exports and imports as shown below. To know the per capita income of an area use the following formula. The formula for gdp per capita can be derived by using the following steps. It is calculated by dividing the area s total income by its total popsulation.