Per capita income means how much each individual receives, in monetary terms. It is the measure of the amount of money that each person earns in the country, of the yearly income generated in the country. This is what each citizen is to receive if the yearly national income is divided equally among everyone. Per capita income is usually reported in units of currency per year. When comparing nations per capita income reflects gross national product A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product , gross national product (GNP), and net national income (NNI). All are specially concerned with counting the total amount of goods and services produced within some "boundary& per person, but it is also used to compare municipalities within nations. When determining the per capita income of a community, the total personal income income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees , supplements to wages and salaries, proprietors' income with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj), is divided by the population.
Per capita income as a measure of wealth
Per capita income is often used as a measure of the wealth of the population of a nation, particularly when comparing countries with substantially different levels of wealth, however, it has several weaknesses as a measurement.
Economic activity that does not result in monetary income, such as services provided within the family, or for barter, are usually not counted. The importance of these services will vary widely between different economies, both between countries and among different groups within a country. As for the per capita income of the majority of the population, using the median In probability theory and statistics, a median is described as the numeric value separating the higher half of a sample, a population, or a probability distribution, from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one. If there is income or Amartya Sen Amartya Kumar Sen CH (born 3 November 1933) received the 1998 Nobel Memorial Prize in Economic Sciences for his work on welfare economics. He is currently the Thomas W. Lamont University Professor and Professor of Economics and Philosophy at Harvard University. He is also a fellow of Trinity College at the University of Cambridge, where from 1998's welfare function In economics, a social welfare function is a real-valued function that ranks conceivable social states from lowest to highest. Inputs of the function include any variables considered to affect welfare of the society (Sen, 1970, p. 33). In using welfare measures of persons in the society as inputs, the social welfare function is individualistic in is the more appropriate approach.[citation needed]
Differing currency exchange rates In finance, the exchange rates between two currencies specifies how much one currency is worth in terms of the other. It is the value of a foreign nation’s currency in terms of the home nation’s currency. For example an exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 91 is worth the same as USD 1 between countries mean that a given amount of money (for example, one US dollar) has differing values in different places.
See also
- Total personal income income received by persons from all sources. It includes income received from participation in production as well as from government and business transfer payments. It is the sum of compensation of employees , supplements to wages and salaries, proprietors' income with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj),
- List of countries by GDP (PPP) per capita This article includes three lists of countries of the world sorted by their gross domestic product at purchasing power parity (PPP) per capita, the value of all final goods and services produced within a nation in a given year divided by the average (or mid-year) population for the same year - GDP calculated at purchasing power parity Purchasing power parity is a theory of long-term equilibrium exchange rates based on relative price levels of two countries. The idea originated with the School of Salamanca in the 16th century and was developed in its modern form by Gustav Cassel in 1918. The concept is founded on the law of one price; the idea that in absence of transaction (PPP) exchange per inhabitant
- List of countries by GDP (nominal) per capita This article includes three lists of countries of the world sorted by their gross domestic product per capita at nominal values, the value of all final goods and services produced within a nation in a given year, converted at market exchange rates to current U.S. dollars, divided by the average population for the same year - GDP at market or government official exchange rates per inhabitant
- List of countries by GNI per capita
- Lending Credit is the provision of resources by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources (or material(s) of equal value) at a later date. It is any form of deferred payment. The first party is called a
- Purchasing power parity Purchasing power parity is a theory of long-term equilibrium exchange rates based on relative price levels of two countries. The idea originated with the School of Salamanca in the 16th century and was developed in its modern form by Gustav Cassel in 1918. The concept is founded on the law of one price; the idea that in absence of transaction
Categories: Income Categories: Wealth | Personal life | Personal finance
Thu, 01 Jul 2010 21:29:34 GMT+00:00
Christian Science Monitor The United States, which had the highest gross domestic product per capita , can't claim to be as happy as Denmark and New Zealand. ... Global Survey: More Bling Won't Buy Bliss AOL News
