Income per capita is a Latin expression that means "income per head". It's the value of average income per person in the country.
It is a concept used in the field of economics to assess the country's development and economic growth.
This value is also used in the calculation of the Human Development Index (HDI), which assesses the country's economic development and quality of life.
How to calculate per capita income?
Per capita income is calculated by dividing the value of the gross national product (GNP) by the population. The GNP is the sum of the total value of everything that was produced in the country by Brazilian companies during a year.
What is the per capita income in Brazil?
According to data from the Brazilian Institute of Geography and Statistics (IBGE), per capita income in Brazil in 2017 was calculated at R$ 1,268.00.
The highest per capita income calculated was in the Federal District (R$ 2,548.00) and the lowest was in the state of Maranhão (R$ 597.00).
Difference between GNP and GDP
Both GNP and GDP are economic indicators, but they should not be confused. The GDP (gross domestic product) is the result of everything that is produced in the country, considering products and services. The GNP is the value of what is produced by Brazilian companies, even if the production takes place outside the country.
The calculation of the GNP value uses the GDP value. To make known the value of the GNP, it is necessary to use the value of the GDP and take from it the value of the products that are sent abroad and add the value received from companies outside Brazil.
per capita family income
The per capita family income is the per capita income that considers all the people who live in the same house. To make the calculation, just divide the total family income by the number of people living in the house.
What is the per capita family income for?
The value of per capita family income is an indicator of a family's financial condition. This indicator is used as a measure for the granting of some government benefits or social programs.
For example: in order to participate in the Student Financing Fund (FIES), the per capita income of the student's family cannot exceed three minimum wages.
Disadvantages of calculating per capita income
The biggest problem pointed out in the calculation of the value of per capita income is the fact that it may not reflect the social reality of a country.
This is because the calculation is done only by dividing the GNP value by the number of inhabitants of the place, without taking into account other issues such as the distribution of income in a given place or in a stratum Social.
The calculation of per capita income does not consider the way in which income is distributed in the country, nor does it consider the social inequalities of a place.
Therefore, even though it is widely used to assess economic development, it does not always reveal the reality of the country's income distribution.
Also know the meanings of GDP per capita and GDP.