Per capita income as an index of economic development can be misleading illustrate with an example.
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Answer:
Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. Per capita income for a nation is calculated by dividing the country's national income by its population.
Per capita income counts each man, woman, and child, even newborn babies, as a member of the population. This stands in contrast to other common measurements of an area's prosperity, such as household income, which counts all people residing under one roof as a household, and family income, which counts as a family those related by birth, marriage, or adoption who live under the same roof.
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Per Capita Income
By
WILL KENTON
Reviewed by
MICHAEL J BOYLE
Updated Nov 10, 2020
What Is Per Capita Income?
Per capita income is a measure of the amount of money earned per person in a nation or geographic region. Per capita income can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. Per capita income for a nation is calculated by dividing the country's national income by its population.
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Income Per Capita
Understanding Per Capita Income
Per capita income counts each man, woman, and child, even newborn babies, as a member of the population. This stands in contrast to other common measurements of an area's prosperity, such as household income, which counts all people residing under one roof as a household, and family income, which counts as a family those related by birth, marriage, or adoption who live under the same roof.
Per Capita Income in the U.S.
The United States Census Bureau takes a survey of income per capita every ten years and revises its estimates every September. The Census takes the total income for the previous year for everyone 15 years and older and calculates the median average of the data. The census includes earned income (including wages, salaries, self-employment income), interest income, dividends as well as income from estates and trusts, and government transfers (Social Security, public assistance, welfare, survivor and disability benefits). Not included are employer-paid healthcare, money borrowed, insurance payments, gifts, food stamps, public housing, capital gains, medical care, or tax refunds.