'While average income is useful for comparison, but it may hide disparities' Discuss
Answers
Per capita income is an essential measure for development and is considered to be one of the most essential features for analyzing nations but it endures from the following conditions:
1. The per capita income does not tell us anything about the distribution of income. For instance, a rich nation with an unequal distribution of income would be much lower than a weak nation with a more equitable distribution of income.
2. The per capita income does not evolve numerous amenities & assistance that affect the quality of life, for example, education facilities, health facilities, etc.
3. The size of population influence the per capita income. Likewise, a large national income, per capita income would be low if a nation has a huge population.
Explanation:
National income is the total income of the residents of the country.total income is not a useful measure in comparing the levels of development of diff countries as:-
1.countries have diff population so comparing them will not tell us what an an average person is likely to earn.
2.it heights disparity between
a.people living in the same country but engaged in diff occupations
b.states with regard to public facilities like education and health
Hence average income is used to compare the countries which is the total income of the country divided by total population..it is also known as per caplta income
However while average income is useful for comparison it does not tell us how this income is distributed among people.
Your helpful Divyansh Thakur