Per capita income refers to the average income earned by people of a country during a particular year. In other words, the average national income earned by an individual of a country in a particular year is called per capita income. It is a key indicator of the national economy and living standard of people of a country. Higher the per capita income, higher is the economic status of a country and vice versa. Since it is an average value, every people of a country cannot be earning income equal to per capita income. The larger part of national income is in the hands of rich and poor people are earning much less than the actual per capita income of a country. The value of per capita income can be calculated as below:

Per Capita Income of a Year =

The concept of per capita income can be understood in terms of real per capita income which is the consideration of inflation or price level.  Such real per capita income can be calculated as below:

Real Per Capita Income of a Year =