Per Capita

Per capita refers to the amount assigned to each person in a group, commonly used in statistics to compare income, spending, or resource usage across populations.
Per Capita
3 min
19-April -2024

Per capita is a Latin term meaning "by head," used in English to indicate the average per person. It is commonly used in statistics and economics for comparisons like GDP per capita or income per capita. This measure helps compare data across populations of different sizes, offering more precise insights than aggregate figures. Per capita data is often contrasted with median values, which better reflect real conditions by accounting for outliers and giving a clearer picture of distribution.

How to calculate per capita?

To calculate per capita, divide a total quantity by the total population. This helps to determine the average per person for metrics like income, GDP, or resource usage. For instance, if a country has a GDP of $1 trillion and a population of 100 million, the GDP per capita would be $10,000. It is a standard way to compare data between regions or populations of different sizes.

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Example of Per Capita

Here’s a simple example of calculating per capita using a basic formula:

Suppose 200 pencils are bought by 20 people.
200 (total quantity) ÷ 20 (total population) = 10

So, the per capita pencil use is 10.

For larger-scale data, per capita can be reported per 100,000 people—common in public health statistics. For instance, flu cases are typically reported per 100,000 individuals for more meaningful comparison across regions.

Applications of the per capita meaning

1. GDP per capita

Gross Domestic Product (GDP) per capita divides a country’s total economic output by its population, offering a clearer way to compare economic well-being across nations. It adjusts for population differences, enabling like-for-like analysis. Real GDP per capita further refines this by adjusting for inflation, reflecting the actual change in economic productivity over time.

2. GNI per capita

Gross National Income (GNI) per capita includes income from residents both inside and outside the country, along with foreign investments such as interest and dividends. It’s a broader indicator of average income than GDP per capita. Unlike the U.S. measure of income per capita, GNI per capita incorporates business earnings and international income sources.

What is the difference between per capita and median?

Per capita vs Median measures:
Unlike per capita measures, which give an average across an entire population, median values such as income often provide a more realistic picture of individual earnings. Median income is the midpoint in an income distribution—half earn more, half earn less. For instance, in the U.S. in 2023, median household income was $78,538, but per capita income stood lower at $43,289.

Per capita includes all individuals regardless of earning status, including non-earners, which can distort the average. Median income better accounts for skewed distributions and outliers.

Also read: What is Securities Transaction Tax (STT)

Final words

If your question is “what is per capita”, it can be explained as a per-person estimation rather than a gross estimate. Per capita can help you find a country’s average living standard or average prosperity per person. It is a reliable economic indicator, especially when you want to compare the standard of living of two or more countries. In contrast to absolute figures of nominal GDP, GDP per capita gives you a better comparison of a country’s average prosperity level.

However, prosperity may not adequately encapsulate the country’s quality of life. In that case, the Human Development Index (HDI) can be a more reliable indicator than GDP per capita, as the former considers many other factors such as life expectancy at the time of birth, climate condition, environmental quality, freedom of speech, political stability, access to education, and many other aspects along with economic prosperity.

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Frequently asked questions

What does 1000 per capita mean?
1000 per capita means the average per-person estimate out of the population of 1,000 people in a group.
What is India's per capita?

According to the World Bank, India’s GDP per capita was US$ 2,410.9 in 2022. As per provisional estimates from the Government of India for 2022–23, the per capita Net National Income at constant (2011–12) prices stood at ₹98,374.

Is per capita 1000 or 100000?
Per capita refers to per head or per person in a certain number in a group or population. If the term is per capita 1000, it means the average estimate of something in a population of 1,000 people. If the term is per capita 100,000, it means the average estimate of something in a population of 100,000 persons.
How to calculate per capita?

To calculate per capita, divide a total metric (e.g., GDP) by the population. For instance, India’s nominal GDP in 2022 was US$ 3.385 trillion, and its population was approximately 1.417 billion. Using the formula:
3,385,090,000,000 ÷ 1,417,173,173 = approximately US$ 2,085 per capita.

Is high per capita good?

A high per capita value typically suggests greater economic output or income per person, indicating a potentially higher standard of living. However, it does not reflect income distribution or inequality within the population. Therefore, while it's a useful indicator, it should be considered alongside other metrics like median income and poverty rates.

What is the per capita formula?

The per capita formula is:
Per Capita = Total Quantity / Total Population
This calculation helps derive an average value per person, commonly used in economic indicators like GDP per capita or income per capita.

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