Per Capita

Reviewed by Sujaini | Updated on Aug 27, 2020

What is a Per Capita?

Per capita is a Latin term that translates to "by head." Per capita is the average per person, and is often used in statistical observances instead of "per person." The statement is used for economic data or documentation but is often extended to almost every other population classification event. Per capita is a term used mainly in economics and statistics to assess the applicability of such metrics to a population. This is most widely used concerning a country's parameters and how the measure relates to the country's population. The most frequent per capita uses are per capita gross domestic product (GDP) and per capita income.

Per capita is used as an apple in economic analysis for comparison of apples between countries, since all countries have different populations. For instance, China is now the second-largest economy in 2017, with a GDP of $16.6 trillion — around 40 per cent lower than the US. But China has far more people than the US, and so China's per capita GDP is just $16,600. Therefore, using GDP per capita reveals that given the country's gross production, most Chinese people still earn much less than the average US.

The overall number is undoubted of concern for regional economic metrics, such as gross domestic product (GDP) or gross national product (GNP). The per capita basis, however, will provide more granular information for the analyst.

Per Capita vs Median

Contrary to figures per capita, median numbers, such as those for wages, offer a potentially more positive image of how much the inhabitants of a given country or regions are expected to receive.

The median income is the amount of income at the very core of an income chart. Exactly half of the people considered earn more than the median income figure while the other half earn less than that.