GDP per capita is equal to the gross domestic product (GDP) divided by population. It is a measure of the average output or income per person.
Two types of GDP per capita are nominal GDP per capita and real GDP per capita. The difference between the two lies in how to calculate it. Nominal GDP uses current market prices; meanwhile, real GDP uses market prices in the base year.
For comparisons between countries, we have to adjust the GDP per capita figure with variations in the purchasing power of currencies in each country (or purchasing power parity). That way, the conclusion we produce does not contain bias because of differences in exchange rates.
Large countries may not necessarily have a large GDP per capita. In fact, smaller but relatively rich countries will have high per capita values. There are no United States or China in the first and second rankings, based on data from the International Monetary Fund. In fact, in the first and second place are Qatar and Macao.
Please notes, changes in real GDP per capita over time are not a measure of changes in the country’s average standard of living. This figure does not account for differences in income distribution between individuals. Also, it also does not consider the value of unpaid labor.