The per capita income for an area may be defined as the total personal income in an area, divided by the number of people in that area.
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 in comparison to other nations. It is usually expressed in terms of a commonly-used international currency such as the US Dollar, and is useful because it is widely known and produces a straightforward statistic for comparison.
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. See: Informal economy
- Per capita income gives no indication of the distribution of that income within the country, so a small wealthy class can increase the measured per-capita income far above that of the majority of the population. See: Income inequality metrics
- Differing currency exchange rates between countries mean that a given amount of money (for example, one US dollar) has differing values in different places. See: Purchasing power
Some national per capita income levels
A ranking of the top ten countries by per capita income (in US dollars):
United States $37,800
Cayman Islands $35,000
San Marino, $34,600
Among the lowest-ranked are East Timor, Sierra Leone and Somalia, with a per capita income of about $500.
Source: CIA World Factbook, 2004