Definition
Per capita is a term derived from Latin that means “by or for each individual.” It is used to measure averages in various fields, such as economics, statistics, and public policy. When a metric is calculated per capita, the total amount is divided by the number of individuals to obtain the average per person.
Examples
- Per Capita Income: If a country’s total income is $5 trillion and its population is 250 million, the per-capita income would be $20,000.
- Per Capita GDP: In a scenario where a city’s GDP is $10 billion and its population is 2 million, the per-capita GDP would be $5,000.
- Per Capita Water Usage: If the total water usage in a town is 2 million gallons per day and there are 10,000 residents, the per capita water usage is 200 gallons per person per day.
- Per Capita Property Tax: Given a total property tax amount of $1 million in a town with 1,000 inhabitants, the per-capita property tax would be $1,000.
Frequently Asked Questions (FAQs)
What does ‘per capita’ mean in terms of economic indicators?
Per capita in economic indicators such as GDP and income refers to the average amount per person in a specified population.
How is per capita different from total or aggregate data?
Total or aggregate data presents the entire measure for a group, whereas per capita breaks it down to an individual level by dividing the aggregate data by the total population.
Does per capita always provide an accurate representation?
Per capita measures give an average, but might not reflect distribution disparities, extreme values, or other statistical nuances.
Can per capita be applied to any dataset?
Yes, per capita can be applied to any dataset involving a total measure and a number of individuals in a population.
What are some common fields that use per capita measurements?
Fields like economics, public health, education, and environmental studies often use per capita measurements to provide standardized, comparable metrics.
Are there limitations to using per capita as a metric?
Yes, per capita measures can mask inequalities and variations within a population, as they only provide a mean value.
Related Terms with Definitions
- Gross Domestic Product (GDP): The total market value of all goods and services produced within a country in a specific time period.
- Median Income: The middle point of income distribution, with half the population earning above this amount and half below.
- Aggregate Data: Data combined from several measurements, showing trends or patterns at a broad level rather than individual details.
- Standard Deviation: A measure of the amount of variation or dispersion in a set of values.
Online References to Online Resources
Suggested Books for Further Studies
- “Statistical Techniques in Business and Economics” by Douglas Lind, William Marchal, and Samuel Wathen
- “Principles of Economics” by N. Gregory Mankiw
- “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics” by Henry Hazlitt
- “Applied Multivariate Statistical Analysis” by Richard A. Johnson and Dean W. Wichern
Fundamentals of Per Capita: Statistical Measures Basics Quiz
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