Per Capita Income Definition Economics

Per ˌcapita ˈincome countable uncountable economics.

Per capita income definition economics. Gross domestic product gdp per capita shows a country s gdp divided by its total population. The income of a country its gdp divided by the number of people living there. Gross national income per capita is gdp plus income earned by residents from foreign investments divided by the population. It includes income from dividends and interest earned overseas.

Similarly if both national product and population grow at the same rate per capita national product will remain constant. Broadly speaking per capita income refers to the real national income divided by the total population of the country. Subscribe to email updates from tutor2u economics. This is not economic development.

Per capita income can be used to determine the average per person income for an area and to. The economic term income per capita or per capita income measures the average income per person in a country region or city in a particular year. If the rate of population surpasses the rate of national income growth then per capita national income will fall. 2019 in this case.

The classifications are updated each year on july 1 and are based on gni per capita in current usd using the atlas method exchange rates of the previous year i e. Income per capita is a measure of income earned per person in a given area preferably a country within a given period of time. It is most often used in reference to metrics of a country and how that. The world bank assigns the world s economies to four income groups low lower middle upper middle and high income countries.

Per capita income is a measure of the amount of money earned per person in a nation or geographic region. This shows how rich or poor the people are on average africa s per capita income fell by a quarter in the 1980s. The table below lists countries in the world ranked by gdp at purchasing power parity ppp per capita along with the nominal gdp per capita. Gross national income per capita is gross national income divided by the population the table below shows countries with the highest gni per capita in 2014 with the data adjusted using purchasing power parity exchange rates.

Per capita is a term primarily used in economics and statistics to determine how certain metrics apply to a population. The world bank defines this as all income earned by a country s residents and businesses no matter where the person is working or the business is located.