what is per capita income

Per capita income (PCI) measures the average income earned per person in a given area, such as a city, region, or country, in a specified year. It is calculated by dividing the areas total income by its total population. Per capita income is often used to measure a sectors average income and compare the wealth of different populations. It is also used to measure a countrys standard of living. Per capita income counts each man, woman, and child, even newborn babies, as a member of the population. However, critics often cite the following drawbacks to the use of per capita income: it is a mean value and does not reflect income distribution; comparisons of per capita income over time need to consider inflation; non-monetary activity, such as barter or services provided within the family, is usually not counted.