What is per capita?
Per capita is a Latin term that means "for each head.” Per capita is used to describe the average amount of something per person in a population. For example, the per capita income of a country is the average income earned by each person in that country. Per capita figures are often used to compare the wealth or other characteristics of different populations.
What is per capita income?
Per Capita income is a measurement tool used to assess the average income per person in a population. It is calculated by taking the total earnings of a country divided by its population size, often represented as GDP (Gross Domestic Product) per capita. The measurement is popularly used to compare living standards between countries, as well as over time within one nation. It allows economists to measure economic productivity and overall wealth over time and between countries.
Per Capita Income vs National Income
Per capita income and national income are two important measures used to judge a country’s economic health. The difference between the two is worth noting; per capita income is an individualistic representation of wealth, calculated by dividing the total sum of all incomes in a certain population by the number of individuals in that population. This metric indicates how economically prosperous people living in a specific nation are. Conversely, national income is the overall amount of money generated or lost from entire economic sectors within a nation. National income encompasses both public and private sector businesses, indicating whether a country as a whole is thriving financially or not.