Per capita income

From ArticleWorld

Per capita income is often used as a means to measure the wealth of a population within a nation. This is particularly useful in comparison to other nations. Usually commonly used international currency such as the Euro Dollar or United States dollar is used as the basis. There are a number of problems when doing this though. It is difficult to account for differences in currencies and the overall purchasing power. Also, this is assumed that the family unit is making only money and not doing some manner of bartering or trading for needed items. This is also an inaccurate means of determining the exact value when broken down to the level of families and individuals.


The main problems with this means of gathering data is that many countries are not overly eager to display their financial status to other countries and also the difficulty of a variety of other factors. Such as citizens living abroad, investments, hidden funds that are not accounted for, and also if there are age restrictions for earning potential.

The key factor also should be to what level the per capita income should be. In any community alone, there are a variety of factors to also account for. If the area is industrial then the earning potential may be steady, but at a lower rate than one that relies on commercial or tourism. The next variable is the timeframe for the per capita income to be evaluated by. In many cases it is by year, but this too would have to be done every year for a number of years to keep accurate.