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What is per capita income? What …

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What is per capita income? What are its limitation
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Yogita Ingle 4 years, 10 months ago

Per capita income or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.
Per capita income is generally used as an index for classifying the development of a country but it has the following limitations:

  • It does not tell us whether there is equal or unequal distribution of income in a country.
  • Apart from per capita income, there are other important aspects of developments such as literacy and health ratio of the people in a country.
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