Per Capita Income Definition And Formula

Income per capita accuracy now that we have looked at an example to demonstrate how income per capita is calculated you may be.

Per capita income definition and formula. 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. 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. Gdp per capita definition. In 2018 the median income per capita was 33 706 2 374 less than average or per capita income according to the u s.

Per capita income pci or average income measures the average income earned per person in a given area city region country etc in a specified year. Per capita originates from the latin language meaning by head or per person. The gross domestic product per capita or gdp per capita is a measure of a country s economic output that accounts for its number of people it divides the country s gross domestic product by its total population. 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.

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. 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. It is calculated by dividing the area s total income by its total population. It shows the purchasing power of an individual and how much economic production is being assigned to every citizen.

Formula to calculate per capita income. Per capita income doesn t reflect inflation in an economy which is the rate at which prices rise over time. Per capita income is national income divided by population size. Gdp per capita is a parameter that breaks down the gdp of a country to measure the economic prosperity of the citizens by simply dividing the gdp with the total population of that country.

Province country city area sector etc.