What are the Limitations of Average Income and Per Capita Income?
By Balaji
Updated on: February 17th, 2023
The limitations of average income and per capita income are social factors like health, education, and others while exclusively discussing the economic quality of life. The amount of money made per capita in a country or region is expressed as per capita income. The average per capita income for an area can be calculated using per capita income.
Table of content
-
1. Limitations of Average Income and Per Capita Income
Limitations of Average Income and Per Capita Income
The average per capita income can also be used to assess the standard of living and quality of life of a population. Average income is the amount of money that each person earns on average in a particular place over a period of time.
- Income distribution cannot be estimated from per capita income. Most of the wealth may end up in the hands of a select few.
- It is better to have a poor society with equitable distribution of wealth than a prosperous nation with unequal income distribution.
- Many facilities affecting the quality of life like educational and medical facilities are not considered while computing per capita income. It is affected by population density.
Based on the above evaluation, we can also say that the countries with high national incomes and significant populations will also have low per capita income.
Related Questions:
- Development of a Country can Generally be Determined by?
- What are the Three Methods of National Income Calculation?
- What is the BPL Income Limit in India?
- The National Income Estimation in India is the Responsibility of?
- National Income Estimates in India are prepared by _________.
- Explain Direct Income vs Indirect Income with Examples?
