We explain what per capita means and in which areas this phrase is used. Also, what are GDP per capita and consumption per capita.
What does “per capita” mean?
The phrase per capita, also written per capita, is an expression taken from Latin and that It can be literally translated as “per head”. It is widely used in economic and statistical fields, when studying certain indicators that refer to the average activity per person or per individual.
The expression, despite having a Latin origin, is used today completely in Spanish, which is why it is not necessary to write it in italics, nor with quotation marks, but with its respective accent. It is common to find it in relation to “per capita income”, “per capita consumption”, “per capita income”, among others.
GDP per capita
The Gross Domestic Product (GDP, sometimes PBI) of a country (also equivalent to its income) is a macroeconomic indicator that expresses, in a single monetary value, the total sum of your production of goods and services during a given period which can normally be annual or quarterly. In that sense, it is a reflection of the economic strength of the country, that is, its productive capacity.
In this way, when we talk about GDP per capita, income per capita or income per capita, we refer to the relationship between the country's GDP and its number of inhabitants so that we can know how much of the first would correspond, statistically, to each of the seconds, if it were distributed uniformly.
GDP per capita It is often used as an indicator of people's standard of living that is, their economic well-being, assuming that this necessarily translates into social and cultural well-being. However, this use has been criticized for being economistic, and for ignoring structural social problems that are not remedied simply because the country makes more money.
Per capita consumption
A case similar to the previous one, per capita consumption is nothing more than the relationship between the number of inhabitants of a country or region, and the total of goods or products of some specific type consumed by them during a certain period of time.
This indicator can be applied to any form of consumption: from ordinary goods, such as food or personal hygiene products, to textiles, cultural goods or services of any nature, such as electricity, telephone, etc.
Per capita consumption, thus, tells us what proportion of the total consumption of a given item corresponds to each inhabitant of the country. This estimate allows us to understand how many goods or services from said sector a person consumes on average, and thus obtain relevant information regarding consumption trends, monitoring of resources and the proportion between supply and demand in that specific economic sector.
References
- “Per capita” on Wikipedia.
- “Per capita” in Fundéu.
- “Per capita income” on Wikipedia.
- “What is GDP per capita and how is it established” (video) in Invest Better.
- “Calculate per capita consumption” in Peru Business Plan.
