GDP

After learning about what GDP is and some different ways to use it, we have to talk about GDP per capita.

Per capita

This is a latin expression meaning per person.

It is calculated by dividing a region's GDP by the number of people in that region.

What is it used for?

It is often used as an approximation to the Quality of Life in a given country, because a greater GDP per capita is historically associated with a lower infant mortality and a wealthier average citizen, for example.

Problem with GDP per capita

Although it is widely used to compare countries of different sizes, it can be misleading if there is huge wealth inequality. That's because, if money and capital is highly concentrated, most citizens' Quality of Life will be pretty low.

Conclusion

This way to measure economic success is, for the most part, very useful! But just because a country has a higher GDP in proportion to it's population, it doesn't necessarily mean life there is better.

Thanks for reading!
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Also check out the previous post!