In the broadest sense, per capita income matters because it serves as a measurement of the stability and wealth within an economy. Per capita income is a ratio of the amount of all a region's income divided by its population. Average income represents the total income of a country keeping in view of the total population. ... this indeed is a better indicator of the living conditions of the people living in a country and could help in knowing their contribution. their contribution is the key to development. Hence, average income is an important criterion because it tells us what an average person is likely to earn and also gives some idea about the rising standard of living. Prosperity of a country depends not only on its national income but also on the number of people who would share it.