What is per capita income and what is it used for?

Per capita income is an expression of Latin that means income per head, that is, it is literally the relative value of the average income of a person per household.

The concept is widely used in the field of economics , as one of the indicators of the economic situation of the country, state or municipality. It is also used to calculate the Human Development Index (HDI) , a number that analyzes a country’s economic development and quality of life.

However, a high per capita income does not automatically mean that the population’s socioeconomic conditions are high, because if income is poorly distributed, social inequality will be disguised.

However, more developed countries have a higher per capita income than less developed ones.

Family per capita income

The calculation of per capita family income is widely used when trying to apply for vacancies in public universities through the Unified Selection System (SISU) or scholarships through the University for All Program (ProUni) and even access to the Student Financing Fund ( FIES).

To simplify the accounts, it is only necessary to count the number of people residing in the household and the respective incomes. However, it is worth remembering that all incomes must be included in the sum, be it pension, retirement, wages etc.

Let’s take an example ! Suppose in a house there are two brothers, both students, and a retired teacher mother and an accountant father. The mother receives a pension of R $ 2,500 and the father R $ 3,500. Therefore, the per capita family income is R $ 1,500.

Per capita family income =  R $ 2,500 + R $ 3,500 / 4 people

Per capita family income = R $ 1,500.00

Income per capital Brazil

According to information from the Brazilian Institute of Geography and Statistics (IBGE) , the Brazilian per capita income in 2018 was R $ 1,373. The amount is equivalent to 1.43 of the minimum wage in effect that year (R $ 954).

In 2017, per capita household income was R $ 1,268. The increase is equivalent to 8.2% the previous national average.

Among the 27 federative units in Brazil, 13 obtained per capita household income below the national minimum wage.

Of these, the Federal District had the highest per capita income, both in 2017 and in 2018, reaching the amount of R $ 2,460. Already Maranhão is the lowest average, with R $ 605, less than half the national figure.

In descending order, see the result of the states:

  1. Federal District – R $ 2,460
  2. Sao Paulo – R $ 1,898
  3. Rio Grande do Sul – R $ 1,705
  4. Rio de Janeiro – R $ 1,689
  5. Santa Catarina – R $ 1,660
  6. Parana – R $ 1,607
  7. Mato Grosso do Sul – R $ 1,439
  8. Mato Grosso – R $ 1,386
  9. Goiás – R $ 1,323
  10. Minas Gerais – R $ 1,322
  11. Espírito Santo – R $ 1,295
  12. Roraima – R $ 1,204
  13. Rondônia – R $ 1,113
  14. Tocantins – R $ 1,045
  15. Rio Grande do Norte – R $ 956
  16. Acre – R $ 909
  17. Sergipe – R $ 906
  18. Paraíba – R $ 898
  19. Pernambuco – R $ 871
  20. Para – R $ 863
  21. Amapá – R $ 857
  22. Ceará – R $ 855
  23. Bahia – R $ 841
  24. Piauí – R $ 817
  25. Amazon – R $ 791
  26. Alagoas – R $ 714
  27. Maranhão – R $ 605

How to calculate per capita income?

It is possible to calculate the per capita income of countries, states and municipalities, in order to analyze the existing inequalities or even the development of each region.

The calculation of per capita income is simple. To do this, just divide the value of the Gross National Product (GDP) by the number of inhabitants.

Per capita income = GDP / number of inhabitants

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