How do national income and per capita income serve as indicators of development?
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Secondly, economic well-being is measure by income –higher the income, greater is the living standard. However, per capita income figure does not give an idea about the composition of goods and services produced in an economy. ... In this since, per capita income is an inadequate index of development.
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Dividing GDP/GNP by the total population one gets per capita GDP/GNP. Conventionally, per capita income is used as an index of development. Economic development involves something more than economic growth. ... Greater the income, higher the standard of living of people, and lower the incidence of poverty and inequality.
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