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.
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.