Per Capita – Concept, use, GDP per capita and consumption per capita

We explain what per capita means and in which areas this phrase is used. Also, what are GDP per capita and consumption per capita.

per capita
“Per capita” indicates an average measure per person.

What does “per capita” mean?

The phrase per capita, also written per capita, is an expression taken from Latin and that can be literally translated as “per head”. It is widely used in the 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 or 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

Gross Domestic Product (GDP, sometimes GDP) of a country (also equivalent to its income) is a macroeconomic indicator that expresses, in a single monetary value, the sum total of your production of goods and services during a given period, which can be normally annual or quarterly. In that sense, it is a reflection of the country’s economic strength, that is, of its productive capacity.

Thus, when we speak of 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, in such a way that we can know how much of the first would correspond, statistically, to each of the seconds, if they were distributed evenly.

GDP per capita is often used as an indicator of people’s standard of living, that is, of 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 cannot be remedied simply because the country makes more money.

Consumption per capita

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 for a specified 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 line corresponds to each inhabitant of the country. This estimate allows us to understand how many goods or services in this sector consumes on average a person, and thus obtain relevant information regarding consumption trends, monitoring of resources and the ratio between supply and demand in that particular economic sector.