How to Calculate per Capita income

Per capita income is a useful economic indicator for an area. Basically, it is the amount of income that each individual of a population would receive if the total income of the area is divided equally among all the inhabitants of the population. Often, per capita income is used to measure the wealth of a particular nation’s population, especially when compared to other nations.

To calculate the per capita income you must first know the total personal income and the population of the area from which you wish to determine the per capita income.

To know the per capita income of an area, use the following formula: RPC = i / P, where RPC = income per capita, i = total personal income and P = total population.

Example of calculation of per capita income: In 2006, the United States had a total personal income of USD$ 11,256,516,000 and had approximately 300,000,000 inhabitants. Therefore, the per capita income of the United States in that year was: RPC = USD$ 11,256,516,000 / 300,000,000, or RPC = USD$ 37,522.

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