A per capita income is an economic measure that tells us how much income, on average, each person in a given population earns. To calculate per capita income, we simply divide a population’s total income by its total population.
So, for example, let’s say we have a town with a population of 10,000 and a total income of $100,000. To calculate the per capita income, we would divide $100,000 by 10,000, which would give us a per capita income of $10.
Per capita income is a useful measure because it allows us to compare incomes across different populations. It’s also a good way to compare living standards, since it tells us how much income people have to spend on things like food, shelter, and clothing.
There are a few things to keep in mind when calculating per capita income. First, it’s important to use accurate population and income figures. Second, per capita income is a mean average
- Determine the number that correlates with what you are trying to calculate. …
- Determine how many people are in the population that you want to measure. …
- Divide the measurement by the total number of people in the population. …
- For smaller measurements, multiply the total by 100,000.
How to calculate per capita
In order to calculate per capita, you must first consider a measurement or amount, which you will then divide by the total population of the group you wish to analyze. The per capita can be calculated using the formula below:
Per capita is equal to one unit divided by the total population.
To determine a specific situation’s per capita, follow these steps:
1. Determine the number that correlates with what you are trying to calculate
For instance, to find the proportion of people with blue hair in a population, you would need to first know how many people in that population have blue hair overall.
2. Determine how many people are in the population that you want to measure
This figure represents the total population of the group you are measuring. For instance, to determine how many people in your neighborhood have blue hair, you would need to know how many people reside there overall.
3. Divide the measurement by the total number of people in the population
In a neighborhood of 250 people, four people having blue hair would result in the formula 4/250 = 0. 016.
4. For smaller measurements, multiply the total by 100,000
So, using the above example, you would take 0. 016 and multiply it by 100,000. This would give you 1,600. You could estimate that 1,600 residents of your neighborhood have blue hair for every 100,000 residents.
Inferring from the aforementioned illustration that the population that was measured contains 1,600 people with blue hair per 100,000 people.
What is per capita?
Per capita is a Latin phrase meaning “by head. It’s used to calculate the average for each person in a measurement. Per capita, for instance, is frequently used to calculate a population’s per capita gross domestic product (GDP). This metric allows for a comparison of the economic output of a company and the population of the nation.
Per capita will be interpreted and measured in accordance with the context in which it is used. This phrase is most frequently used to produce a report of an average of something per person in economic, business, or statistical contexts. Also used in wills to specify that beneficiaries should receive proportionate shares of an inherited estate.
How per capita is used
The following are the applications of per capita that are most frequent:
GDP per capita
GDP per capita is a metric used to gauge a nation’s economic performance relative to its population. By dividing a country’s total domestic output by its population, the GDP is determined. The formula for GDP is as follows:
Gross domestic product/population = GDP per capita
A fictitious example of how to determine a nation’s GDP per person is as follows:
In 2015, the US had a $20 trillion gross domestic product. In 2015, there were 300 million people living in the nation. You could calculate 20 trillion/300 million = 66,666 using the formula above. As a result, Americans made an average of $66,660 per person in 2015, or $66,666 as measured by the GDP per capita or person in the United States.
It’s crucial to remember that a high GDP does not necessarily translate into a high GDP per person for a nation. As an illustration, China frequently has a higher GDP than many other nations in the world. However, China also has the world’s highest population, so the GDP per capita will be significantly lower. A country’s GDP per capita will typically be lower the more people living there.
Gross national income per capita
A similar formula to that used to calculate GDP per capita can also be used to determine a country’s gross national income per capita. The same data used to calculate GDP per person will also be used to calculate gross national income per person, plus any income that locals have received as a result of foreign investments. The income from interest and dividends earned abroad is also included in the gross national income per person.
The World Bank defines gross national income per capita as the total income earned by citizens of a country as well as by its businesses, regardless of how they obtain the money or where they are located.
Every September, an updated estimate of the nation’s per capita income is provided by a survey of the per capita income in the United States, which is conducted every ten years. The U. S. Census is in charge of providing these statistics and surveys, and does so by considering each U S. resident over the age of 15 for each year. Using this information, the U. S. Census data is used to estimate the annual average per capita income for residents.
Per Capita
FAQ
How is per capita measured?
Divide a statistical measurement for an organization by the population of that organization to obtain per capita. So, if 10 people jointly own 1,000 apples, we can estimate that there are 100 apples per person.
How is the per capita of a country calculated?
To determine per capita, one would divide the statistical figure by the population under consideration. The total figure is undoubtedly interesting for national economic indicators like gross domestic product (GDP) or gross national product (GNP).
What does per capita mean?
The calculation of GDP per capita is done by dividing the gross domestic product (GDP) of a nation by its population. This calculation reflects a nation’s standard of living.
