However, China also has the highest population in the world, meaning that the GDP per capita will be much less. The higher the population of a country, the lower it's GDP per capita will often be. 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. 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.
The gross national income per capita also takes into account income that has been earned from interest and dividends overseas. According to the World Bank, gross national income per capita is the total amount of income earned by residents of a country as well as the companies in the country no matter where the person or business obtains the money or is located.
In the United States, the per capita income is surveyed once every 10 years and offers an updated estimate of the country's per capita once every September. The U. Census is responsible for providing these numbers and surveys and does so by taking into account the income of every U. Using this information, the U. Census provides residents with an estimate of the average per capita income for each year.
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Develop and improve products. List of Partners vendors. Per capita is a Latin term that translates to "by head. The phrase is used with economic data or reporting but is also applied to almost any other occurrence of population description. Per capita is a term primarily used in economics and statistics to determine how certain metrics apply to a population. It is most often used in reference to metrics of a country and how that metric applies to the population of that country.
The most common uses of per capita are gross domestic product GDP per capita and income per capita. To calculate per capita, one would take the statistical number and divide it by the population being analyzed. For example, U. The United States' population in the same period was approximately million.
In economic analysis, per capita is used as an apples to apples comparison between countries, as all countries have different populations. Thus, using per capita GDP shows that most Chinese citizens are still earning far less than the average American despite the country's aggregate output. For national economic indicators , such as gross domestic product GDP or gross national product GNP , the total figure is certainly of interest. However, the per capita basis will give the analyst more granular information.
In contrast to per capita measures, median numbers, such as those for income, provide an arguably more accurate picture of how much the residents of a particular country or area are likely to earn. The median income is the income level in the very middle of a list of incomes. Exactly half of the people considered earn above the median income figure while the other half earn below that number. Per capita expresses the average number for all of the citizens of a particular country or area.
Therefore, it can be a misleading number because it includes everyone from infants to senior citizens, and fails to account for statistical outliers. The median income in this instance will take into account any outliers.
The World Bank issues data on total GDP and GDP per capita but each statistic can provide a conflicting perspective on the economic state of a country and the wealth of its people. For countries where the population is not increasing rapidly, the difference between GDP per capita growth and total GDP growth is minimal.
However, for countries with rapidly growing populations such as those in Africa and South Asia, reporting GDP growth can be highly misleading because a country can show GDP growth overall but a decline in per capita growth. National Institute of Mental Health. Bureau of Economic Analysis. Central Intelligence Agency. Federal Reserve Bank of St. World Bank. Census Bureau. Actively scan device characteristics for identification. Use precise geolocation data.
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List of Partners vendors. Table of Contents Expand. Table of Contents. Definition and Examples of Per Capita. How Does Per Capita Work? Limitations of Per Capita. By Kimberly Amadeo. Learn about our editorial policies. Reviewed by Thomas J. Article Reviewed November 06,
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