![Map of countries by GDP (nominal) per capita in 2021](https://upload.wikimedia.org/wikipedia/commons/2/24/Map_of_countries_by_GDP_%28nominal%29_per_capita_in_2021.svg)
Per capita income (PCI) or total income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.
Per capita income is
national income divided by population size. Per capita income is often used to measure a sector's average income and compare the wealth of different populations. Per capita income is also often used to measure a country's
standard of living. It is usually expressed in terms of a commonly used international currency such as the
euro
The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
or
United States dollar
The United States dollar ( symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the officia ...
, and is useful because it is widely known, is easily calculable from readily available
gross domestic product
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...
(GDP) and population estimates, and produces a useful statistic for comparison of wealth between
sovereign territories. This helps to ascertain a country's development status. It is one of the three measures for calculating the
Human Development Index
The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, wh ...
of a country. Per capita income is also called average income.
Critics
Critics often cite the following drawbacks to the use of per capita income:
* Comparisons of per capita income over time need to consider inflation. Without adjusting for
inflation
In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reduct ...
, figures tend to overstate the effects of economic growth.
* International comparisons can be distorted by cost of living differences not reflected in exchange rates. Where the objective is to compare living standards between countries, adjusting for differences in
purchasing power parity will more accurately reflect what people are actually able to buy with their money.
* It is a
mean
There are several kinds of mean in mathematics, especially in statistics. Each mean serves to summarize a given group of data, often to better understand the overall value (magnitude and sign) of a given data set.
For a data set, the '' ari ...
value and does not reflect
income distribution
In economics, income distribution covers how a country's total GDP is distributed amongst its population. Economic theory and economic policy have long seen income and its distribution as a central concern. Unequal distribution of income causes ec ...
. If a country's income distribution is skewed, a small wealthy class can increase per capita income substantially while the majority of the population has no change in income. In this respect,
median income is more useful when measuring of prosperity than per capita income, as it is less influenced by outliers.
* Non-monetary activity, such as barter or services provided within the family, is usually not counted. The importance of these services varies widely among economies.
* Per capita income does not consider whether income is invested in factors likely to improve the area's development, such as health, education, or infrastructure.
See also
*
List of countries by average wage
The average wage is a measure of total income after taxes divided by total number of employees employed. In this article, the average wage is adjusted for living expenses "purchasing power parity" (PPP). This is not to be confused with the averag ...
*
List of countries by GDP (nominal) per capita—GDP at market or government official exchange rates per inhabitant
*
List of countries by GDP (PPP) per capita—GDP calculated at
purchasing power parity (PPP) exchange per inhabitant
*
List of countries by GNI (nominal) per capita
This is a list of countries by gross national income per capita in 2020 at nominal values, according to the Atlas method, an indicator of income developed by the World Bank.
Methodology
The GNI per capita is the dollar value of a country's f ...
*
List of countries by GNI (PPP) per capita
This article includes a list of countries of the world sorted by their Gross National Income (GNI) per capita at purchasing power parity (PPP). For rankings regarding wealth, see list of countries by wealth per adult.
List
See also
*List ...
*
List of countries by income equality
A ''list'' is any set of items in a row. List or lists may also refer to:
People
* List (surname)
Organizations
* List College, an undergraduate division of the Jewish Theological Seminary of America
* SC Germania List, German rugby unio ...
*
Total personal income Total personal income is defined by the United States' Bureau of Economic Analysis as:income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments ...
*
List of U.S. states by adjusted per capita personal income
List of states by adjusted per capita personal income estimates the per capita personal income of residents of U.S. states adjusted by differences in the cost of living, called "regional price parities" by the U.S. Bureau of Economic Analysis. Th ...
{{United_States_locations_by_per_capita_income
Gross domestic product