GDP per capita is defined as:

A measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country. The per capita GDP is especially useful when comparing one country to another because it shows the relative performance of the countries.

Nevertheless, is it really a good way of measuring and comparing the standard of living between countries. If the GDP per capita in jordan is 5200$ per year does that mean there is no millionares who earns as much as 100 citizens would earn? Does the fact that the GDP per capita in russia is 14,600$ means that there are no people earning less than that?

Here we introduce the term inequality...

Economic inequality (also described as the gap between rich and poor, income inequality, wealth disparity, wealth and income differences or wealth gap) is the state of affairs in which assets, wealth, or income are distributed unequally among individuals in a group, among groups in a population, or among countries.

To simplify that, it is when a small group of the citizens receives much more higher income that the GDP per capita and the larger group receives much less. In this case, the GDP per capita will appear to be high, yet most of the citizens will not be enjoying the high income.

Inequality is in fact one of the characteristics of a free market where is there is no or minimal government interference.

Most people view that huge inequalities in income are unfair. People with low incomes will experience relatively low standards of living and fewer opportunities than people with high incomes. They may live in a state of absolute poverty, whereby they do not have access to the basic necessities needed to sustain life. Or they may live in relative poverty, where their living standards are well below and observed average in an economy.

This will never be shown in the GDP of a country or even their GDP per capita.

To start with, did u know that 85 people around the world have as much wealth as 3.5 billion human which means that 0.0000012% of the world's population have as much as 50%.

To be more specific the GDP per capita is 40,000$. This might show that everyone is enjoying a relatively high standard of living. However, the poorest 10% share no more than 1% of the income and they also have not received a raise in their income in the last decade. If we adjust this to inflation their income is getting smaller.

In USA, it has been found that from 2009-2012 the top 1% in the U.S. claimed 95% of gains from the economic recovery and the rest only experienced 0.4% growth of income.


In mexico, the top 10% make 30 times as much as the poorest 10%.

In India, the GDP per capita is 1500$ per year; however, more than 42% of the population is live on less than one dollar a day.

In conclusion, although GDP or GDP per capita might give the first glimpse of the standard of living. It is most certain that it stands useless when it comes to the equality in the distribution of income.