Per capita income

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Per capita income or average income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area's total income by its total population.[1][2]

Per capita income is often used to measure an area's average income. The currency used is often the euro or the US dollar as they are widely used international currencies.

It has been criticised for not accounting for inflation. This means that it overstates economic growth. It also means that a small number of wealthy people can increase the country's per capita income whilst the rest of the population experience no change. It does not account for the differences in the cost of living between countries.[3]

References[change | change source]

  1. Per capita income The Free Dictionary
  2. Income Per Capita Definition, Investopedia
  3. Oulton, Nicholas (22 December 2012). "Hooray for GDP! GDP as a measure of wellbeing". VOX, CEPR's Policy Portal. Retrieved 02 September 2016.  Check date values in: |access-date= (help)