What is per capita income approach to economic development?
James Olson
Updated on February 07, 2026
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. This helps to ascertain a country’s development status.
What is the per capita income of rich countries according to World development Report?
In World Development Reports, brought out by the World Bank, this criterion is used in classifying countries. Countries with per capita income of US$ 12,056 per annum and above in 2017, are called rich countries and those with per capita income of US$ 955 or less are called low-income countries.
Is per capita income to measure of development?
No , Per capita income is not a true measure of the Development because:- 1) It only tells us about average income not how income is distributed among the people. 2) It only give us an idea of the economic aspect.
Is per capita income an indicator of economic growth or economic development?
The growth in real GDP per capita ndicates the pace of income growth per head of the population. As a single composite indicator it is a powerful summary indicator of economic development.
Why per capita income is not a good measure of economic development?
Per capita income is an average and this average may not represent the standard of living of the people, if the increased national income goes to the few rich instead of giving to the many poor. Thus unless national income is evenly distributed, per capita income cannot serve as a satisfactory indicator of development.
What is the lowest income country?
The 20 countries with the lowest gross domestic product (GDP) per capita in 2020 (in U.S. dollars)
| Characteristic | GDP per capita in U.S. dollars |
|---|---|
| Niger | 565.87 |
| Afghanistan | 580.82 |
| Eritrea | 588.25 |
| Yemen | 620.24 |
Why is per capita income important for development?
Per capita income can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population. Per capita income for a nation is calculated by dividing the country’s national income by its population.
Is GDP per capita a good measure of economic development?
Per capita GDP shows a country’s economic product value per person. Universally, it is one of the best measures of prosperity.
