Only the per capital income cannot reflect the true state of economic development why?
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Answered by
214
Per capita income, which is defined as the income per head of a country's population, is not the foolproof measure to observe economic development.
Economic development is more about the welfare of public than just income.
Per capita income doesn't reflect the actual standard of living of the common people. It doesn't count the level of healthcare, education and such essential infrastructure facilities enjoyed by the people, which are essential benchmarks for development.
It also doesn't account the income distribution. A country with a few rich and many poor could still have a high per capita income.
Age Factor is also avoided in per capita income, for instance, in a country with a very young or very old population, per cap income may not be exactly accurate, because neither the children nor the elderly people contribute to national income.
Development is a wide concept, and apart from income, it must evaluate the socioeconomic conditions of the ordinary citizens of the country. Therefore, per capita income alone fails to be a truly reliable measure of development.
Economic development is more about the welfare of public than just income.
Per capita income doesn't reflect the actual standard of living of the common people. It doesn't count the level of healthcare, education and such essential infrastructure facilities enjoyed by the people, which are essential benchmarks for development.
It also doesn't account the income distribution. A country with a few rich and many poor could still have a high per capita income.
Age Factor is also avoided in per capita income, for instance, in a country with a very young or very old population, per cap income may not be exactly accurate, because neither the children nor the elderly people contribute to national income.
Development is a wide concept, and apart from income, it must evaluate the socioeconomic conditions of the ordinary citizens of the country. Therefore, per capita income alone fails to be a truly reliable measure of development.
Answered by
177
The per capita income can not reflect the true state of economic development because if the income of a particular group have increased or have become rich and the income of other groups remain the same, it will reflect an increase in the per capita income. But, in general, only a particular group of people have become rich and only their living condition have improved. Therefore, the increase in the per capita income does not reflect the true state of economic development.
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