<p>Regardless of the population size, what matters in terms of income is real or nominal terms. The gdp per capita may rise despite a constant population for the economy. But is it real terms that’s what matters. In an environment where the inflation skyrockets, gdp per capita is misleading. </p>

CC BY-SA 4.0
2019-06-26T21:50:50.920Z
2019-06-26T21:50:50.920Z
usergrad
<p>Technically yes, but mind the fact that GDP per capita is, by definition, an arithmetic mean of a country's income; meaning that it measures directly the average economy's aggregate output per person in the country. 'Average income' can be interpreted in a number of ways, one of which is GDP-per-capita, but another is median income (50th percentile income), which can tell a very different story (particularly around recessions).</p>

<p>At face value, the question seems to answer itself since 'GDP-per-capita' and 'average income' are generally used interchangeably; however there is evidently some nuance here. </p>

<p>I hope I've answered your question.</p>

CC BY-SA 4.0
2019-06-24T04:15:17.173Z
2019-06-24T17:58:23.657Z
2019-06-24T17:58:23.657Z
Matthew Ackman
<p>Essentially, I'm trying to determine if there is a correlation between a drop in GDP per capita (e.g. during the 2008 financial crisis, Australia's GDP per capita dropped from USD \$49,000 to $42,000 2009) and the average income.</p>

CC BY-SA 4.0
2022-03-25T10:12:08.587Z
Maybe median income adjusted by purchasing power parity is what you're looking for? It takes into account how much you can actually buy in a country with the money you earn
Jimmy T.
<gdp><population-economics>
Does a drop in GDP per capita, with the population staying around the same, mean people on average are poorer?
ThoughToo
# Does a drop in GDP per capita, with the population staying around the same, mean people on average are poorer?

(Asked by: username_0 on 2019-06-24)

Essentially, I'm trying to determine if there is a correlation between a drop in GDP per capita (e.g. during the 2008 financial crisis, Australia's GDP per capita dropped from USD \$49,000 to $42,000 2009) and the average income.

**Tags:** gdp, population-economics

> **Comments:**
> **username_1**: Maybe median income adjusted by purchasing power parity is what you're looking for? It takes into account how much you can actually buy in a country with the money you earn  

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## 2 answers

### Answer by username_2 on 2019-06-26. Score: 2

Regardless of the population size, what matters in terms of income is real or nominal terms. The gdp per capita may rise despite a constant population for the economy. But is it real terms that’s what matters. In an environment where the inflation skyrockets, gdp per capita is misleading.


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### Answer by username_3 on 2019-06-24. Score: 1

Technically yes, but mind the fact that GDP per capita is, by definition, an arithmetic mean of a country's income; meaning that it measures directly the average economy's aggregate output per person in the country. 'Average income' can be interpreted in a number of ways, one of which is GDP-per-capita, but another is median income (50th percentile income), which can tell a very different story (particularly around recessions).

At face value, the question seems to answer itself since 'GDP-per-capita' and 'average income' are generally used interchangeably; however there is evidently some nuance here.

I hope I've answered your question.


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