Question

What are the limitations of per capita income as an index of economic development?

Answer 1

Answer:

we will not come to know about proper development

we can't judge non material

things like peace , education

Answer 2

Answer:

Limitations of per capita income as an indicator of development:

1) It does not indicate the disparities in the distribution of incomes.

Example: The wide gap between the incomes of the extremely rich and very poor people.

2) It does not indicate long term sustainability as non renewable resources are liable to be exhausted.

3) The method of calculating per capita income also varies among different countries. thus, it is not highly reliable for comparison.

4) The data represented by per capita income is only theoretically possible and not practically.