Question & Answer
QUESTION

What is per capita income ?

ANSWER

Per capita income is the measurement of money earned per person in a certain zone. In layman terms, we can say that “Per Capita income is the Income supposedly earned by a single person in a country.” It is calculated by dividing country's national income by its population. It should not be misunderstood by average income (because it includes non-employed and kids population), rather it serves as a pointer to a country's living standards. It can be applied to the average per-person income of a village, city, state or country. It can be used as a means of gauging the living circumstances and quality of life of citizens.


"Have a doubt going on your head? Download Vedantu's Instant Doubt Solving App now and get all your doubts cleared by our experts."


 Income per capita tallies each men, women, child, new born babies, as a member of the populace. It stands in disparity to other common measurements of an area's richness, like household income, which mainly counts all the member residing under one roof as a household, and family income, which counts as a family those related by birth, marriage or adoption. This is mainly used to understand the prosperity of the population with those of others. This also helps to determine a country's development status. It is one of the three measures for calculating the Human Development Index of a country.