Income Per Capita Formula

1 per capita income is often used measure an area s average income.

Income per capita formula. The term gdp per capita refers to the assessment of the economic output of a country that accounts for the country s population. 2 this is used to see the wealth of the population with those of others. Calculate the per capita income by dividing the total income by the population. The key difference between gdp per capita and income per capita is that gdp per capita is the measure of the total output of a country where the gross domestic product gdp is divided by the total population in the country whereas income per capita is a measure of income earned per person in a country within a given period of time.

In 2018 the median income per capita was 33 706 2 374 less than average or per capita income according to the u s. Formula to calculate per capita income. 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. Province country city area sector etc.

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. 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. 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. 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.

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. 4 this helps to ascertain a country s development status. 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.

For example if the per capita income for a nation rose from 50 000 per. Gdp per capita can be said to be a measure of a nation s economic output which shall account for its population that is the count of the person. It is calculated by dividing the area s total income by its total population. In other words gdp per capita is the gross domestic product of a country that is apportioned against its entire population.

For example a small town with a population of only 20 people had a total income of 200 000 in 2010. The formula divides the nation s gross domestic product that is the gdp by its number of people in short the total population of the nation.