Per Capita: What It Means, How It’s Determined, Uses, and Examples

What Is Per Capita?

Per capita is a Latin term that translates to “by head” and is used in English to mean average per person. Per capita is often used in place of “per person” in statistical observances. If an amount is expressed per capita, it means that amount per person.

The phrase can be used for almost any kind of population description, but is common when discussing economic data. This could include a country’s:

• Gross domestic product (GDP)
• Gross national product (GNP)
• Income
  

Understanding Per Capita

Per capita is a term primarily used in economics and statistics to determine how certain metrics apply to a population. It is most often used in reference to metrics of a country and how that metric applies to the population of that country. The most common uses of per capita are GDP per capita, which breaks down a country's GDP to an amount per person, and income per capita, which determines the average per-person income for an area.

For national economic indicators, such as GDP or GNP, the total figure is certainly of interest. However, the per capita basis will give the analyst more granular information and allows for better apples-to-apples comparisons across different countries.

Per Capita vs. Median

In contrast to per capita measures, median numbers, such as those for income, provide an arguably more accurate picture of how much the residents of a particular country or area are likely to earn.

The median income is the income level in the very middle of a list of incomes. Exactly half of the people considered earn above the median income figure, while the other half earn below that number. Real median household income in the United States in 2023 was $78,538, whereas per capita income was lower at $43,289.

Per capita expresses the average number for all of the citizens in a particular country or area. Therefore, it can be a misleading number because it includes everyone from infants to older citizens, and fails to account for statistical outliers. The median income in this instance will take into account any outliers.

Per Capita and Poverty

The World Bank issues data on total GDP and GDP per capita, but each statistic can provide a conflicting perspective on the economic state of a country and the wealth of its people.

According to some economists, a country’s aggregate economic growth, or its overall GDP, is not what matters when the concern is the poverty level of individuals in a country. For example, if an outlet reports that the world’s GDP grew by 3%, it may sound like great news, but it would fail to take into consideration that the world’s population grew by 1.5%, making the GDP number less impressive.

For countries where the population is not increasing rapidly, the difference between GDP per capita growth and total GDP growth is minimal. However, for countries with rapidly growing populations, such as those in Africa and South Asia, reporting GDP growth can be highly misleading because a country can show GDP growth overall but a decline in per capita growth.

Example of Per Capita

In economic analysis, per capita is also used as an apples-to-apples comparison between countries, as all countries have different populations.

For example, U.S. GDP was $27.72 trillion in 2023, according to the latest data from the World Bank. The United States’ population in the same period was approximately 334.91 million. That results in a GDP per capita of $82,769.

China, meanwhile, had a GDP of around $17.79 trillion in 2023. However, China has far more people than the United States, so the per capita GDP for China is just $12,614. Thus, using per capita GDP shows that most Chinese citizens are still earning far less than the average American despite the country’s aggregate output.

The Bottom Line

Per capita is a way of averaging values on a per-person basis to better understand how each individual shares in aggregated figures. In economics, GDP and income per capita are used to understand a country’s average level of prosperity and for making like comparisons across countries. You can also use per capita measures of noneconomic data, such as alcohol consumption per capita or car crashes per capita.