Per capita income

Per capita income (PCI) or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.[1][2]

As a measure of prosperity

Per capita income is national income/population size

Per capita income is often used to measure an area's average income and compare the wealth of different populations. Per capita income is often used to measure a country's standard of living. It is usually expressed in terms of a commonly used international currency such as the euro or United States dollar, and is useful because it is widely known, is easily calculable from readily available gross domestic product (GDP) and population estimates, and produces a useful statistic for comparison of wealth between sovereign territories. This helps to ascertain a country's development status. It is one of the three measures for calculating the Human Development Index of a country.

United States

In the United States, it is defined by the U.S. Census Bureau as the following: "Per capita income is the mean money income received in the past 12 months computed for every man, woman, and child in a geographic area."[3] (Children are counted if they are at least 15 years old.)

Critics

Critics claim that per capita income has several weaknesses in measuring prosperity:[4]

  • Comparisons of per capita income over time need to consider inflation. Without adjusting for inflation, figures tend to overstate the effects of economic growth.
  • International comparisons can be distorted by cost of living differences not reflected in exchange rates. Where the objective is to compare living standards between countries, adjusting for differences in purchasing power parity will more accurately reflect what people are actually able to buy with their money.
  • It is a mean value and does not reflect income distribution. If a country's income distribution is skewed, a small wealthy class can increase per capita income substantially while the majority of the population has no change in income. In this respect, median income is more useful when measuring of prosperity than per capita income, as it is less influenced by outliers.
  • Non-monetary activity, such as barter or services provided within the family, is usually not counted. The importance of these services varies widely among economies.
  • Per capita income does not consider whether income is invested in factors likely to improve the area's development, such as health, education, or infrastructure.

See also

References

  1. ^ Per capita income The Free Dictionary
  2. ^ Income Per Capita Definition, Investopedia
  3. ^ U. S. Census Bureau – Per Capita Income, American Community Survey Archived 2015-10-04 at the Wayback Machine
  4. ^ "The Economics of Well-Being" Harvard Business Review 2011
Disposable household and per capita income

Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains.

Average household incomes need not map directly to measures of an individual's earnings such as per capita income as numbers of people sharing households and numbers of income earners per household can vary significantly between regions and over time.

Average household income can be used as an indicator for the monetary well-being of a country's citizens. Mean or median net household income, after taxes and mandatory contributions, are good indicators of standard of living, because they include only disposable income and acknowledge people sharing accommodation benefit from pooling at least some of their living costs.

It is important to note in the tables below the difference between median and mean income. Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group.

List of Arizona locations by per capita income

Arizona has the twenty-ninth highest per capita income in the United States of America, at $20,275 (2000). Its personal per capita income is $26,838 (2003).

List of Colorado locations by per capita income

Colorado is the fifth-richest state in the United States of America, with a per capita income of $24,049 (2000) and a personal per capita income of $34,283 (2003).

List of Connecticut locations by per capita income

Connecticut is the richest state in the United States of America with a per capita income $36,775 (2010). All data is from the 2010 United States Census and the 2011-2015 American Community Survey 5-Year Estimates.

List of Hawaii locations by per capita income

Hawaii has the eighteenth highest per capita income in the United States of America, at $21,525 (2000). Its personal per capita income is $46,034 (2014). The information is represented in the table below.

List of Kansas locations by per capita income

Kansas has the twenty-sixth highest per capita income in the United States, at $20,506 (2000). Its personal per capita income is $29,935 (2003).

List of Massachusetts locations by per capita income

Massachusetts is the third richest state in the United States of America, with a per capita income of $25,952 (2000) and a personal per capita income of $39,815 (as of 2003). Many of the state's wealthiest towns are located in the suburban area around Boston with a high concentration of wealthy cities and towns just to the west of Boston, in the MetroWest area, and along the northern and southern coastal regions that have easy access to the city, in particular the North Shore of Boston which is known as the region's "Gold Coast" (see North Shore (Massachusetts)). Many wealthy summer communities are located along the shores of Cape Cod and there are several other wealthy communities located farther west than the Boston Metro area clustered in suburban areas around Worcester and in rural areas in far western parts of the state. All data is from the 2009-2013 American Community Survey 5-Year Estimates.

List of Montana locations by per capita income

Montana is the forty-sixth richest state in the United States of America, with a per capita income of $17,151 (2000).

List of Nevada locations by per capita income

Nevada is the sixteenth richest state in the United States of America, with a per capita income of $21,989 (2000) and a personal per capita income of $31,266 (2003).

List of New Hampshire locations by per capita income

In 2015 New Hampshire ranked fifth in terms of per capita income in the United States of America, at $34,362 as of the 2011-2015 American Community Survey 5-year estimate.

List of New Mexico locations by per capita income

New Mexico has the fifth lowest per capita income in the United States of America, at $17,261 (2000). Its personal per capita income is $25,541 (2003).

List of Oregon locations by per capita income

The following is a list of Oregon counties and places in order of per capita income.

Oregon has the twenty-third highest per capita income in the United States of America, at $20,940 (2000). Its personal per capita income is $29,340 (2003).

List of South Dakota locations by per capita income

South Dakota is the twenty-eighth richest state in the United States of America, with a per capita income of $26,959 (2010).

List of Tennessee locations by per capita income

Tennessee is the thirty-fifth-richest state in the United States of America, with a per capita income of $19,393 (2000).

List of U.S. states and territories by income

This is a list of U.S. states, territories and the District of Columbia by income.

List of Virginia locations by per capita income

Virginia has the sixth highest per capita income of any state in the United States of America, at $23,975 (2000). Its personal per capita income is $33,671 (2003).

List of Washington locations by per capita income

Washington is the twelfth richest state in the United States of America, with a per capita income of $22,973 (2000) and a personal per capita income of $33,332 (2003).

List of lowest-income counties in the United States

This is a list of the lowest-income counties in the United States.

Note: This list does not include unincorporated territories of the United States.

Median income

Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group. Mode income is the most frequently occurring income in a given income distribution.

Median income can be calculated by household income, by personal income, or for specific demographic groups.

United States locations by per capita income
Nationwide
State locations
Related lists

This page is based on a Wikipedia article written by authors (here).
Text is available under the CC BY-SA 3.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.