“Per capita ” means “per person.” In statistics, business, and economics, this term is used to describe an average per person.
The Key Takeaways
- The Latin word per capita means “per person.”
- The term per capita is used often to give context to data.
- Divide the measurement by the number of people being measured to calculate the per-capita measurement.
- The per capita measure can be used by economists to better gauge the standard of living in a country.
Definition and examples of per capita
Per capita is just another way to say “per person”. This phrase is used most often to provide context for data. It can be helpful to compare information between groups on a “per capita” basis to ensure that the comparisons are accurate.
- Alternative definition: Per capita is a legal term with a precise definition. This means to distribute an estate equally between all living beneficiaries. It is the opposite of ” per Stirpes.” This is in contrast to “a data-component=”link” data-ordinal=”1″ data source=”inlineLink” and/or “per stirpes.”
The economic indicator per capita is used often to compare countries with different populations sizes. Gross domestic product (GDP), and income are the most common indicators measured using per capita.
Note:
In rare cases, the data is reported per 100,000 people instead of strictly per capita. The data is not reported per capita but rather per 100,000 people. It would be difficult to compare a strict per capita measurement.
How do you calculate per capita?
Divide a statistic measurement of an organization by the population. If 1,000 apples are owned by 10 individuals, then we can say that there are 100 per capita.
What is the per capita rate?
How this type of measurement is done can be demonstrated by observing how GDP data are clarified through per capita calculations.
The GDP is a dollar-based measure of all the goods and services produced within a nation’s borders. It is a basic measure of a nation’s economic size, usually reported over a period of one quarter or one year.
Note:
The Gross National Product (GNP) was replaced in 1991 by the GDP. GNP does not include income earned by foreigners or their businesses in the U.S. 3
The raw GDP data is altered by economists to allow for better comparisons between countries. purchasing-power parity is used to remove the effect of currency exchange rates. It estimates the U.S. value of local goods and services. To remove the effects from inflation or deflation, they use real GPD.
A per capita measure of GDP can be used to compare the two. GDP per capita is the GDP of a country divided by its population.
The United States has the second largest economy in the world after China. It will have 334,000,000 people in 2021. 6
Gross National Income per Capita
Gross national income is another common measurement for per capita. This is the GDP plus foreign investment income divided by population. This includes dividends and interest from overseas. This includes income from dividends and interest earned overseas.
Census Bureau Income per Capita Measurement
Census Bureau of the United States calculates their own measure of income per capita. This figure includes income earned, but excludes benefits. This figure includes income from investments, but excludes capital gains resulting from the sale of a home. This includes government payments such as Social Security and welfare. It does not include tax refunds. This does not include tax refunds, food stamps or Medicare/Medicaid benefits.
Due to these differences, the number is usually much lower. In 2019, the Census Bureau estimated a per capita income of just under $34,000. 10
Per Capita Limitations
Per capita is a useful way to provide context for a variety of data. However, it’s not the best method of analyzing all types of information.
The median income, when comparing income per capita in the United States, is more representative of actual average incomes, because it takes into account income inequality, which per capita income may not.
The median is where half of the people earn more, and the other half less. This is a better number, as it takes into account the few very wealthy individuals whose incomes tend to skew the average upward.
