What is Pre Capita Income ?


What is Per Capita Income ?

  • When total national income (GDP) divided by total population , known as per capita income.
  •  It is not the average income (because it includes children and non-working population) but serves as an indicator of a country's living standards.
  • It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross national income) and dividing it by the total population.
  • It is usually expressed in terms of a commonly used international currency such as the Euro or United States dollar, and is useful because it is widely known, easily calculated from readily-available GDP and population estimates, and produces a useful statistic for comparison of wealth between sovereign territories. 
  • This helps the country to know their development status.