GDP per Capita | Definition, Factors, Indications, Pros, and Cons

GDP Per Capita is a measurement of the approximate value of a country's gross domestic product (GDP) contributed by each member of its population.It is calculated by taking a country's GDP and dividing it by the country's population. GDP refers to the total value of all goods and services produced within a country's borders during a period of time, usually annually."Purchasing power parity", or the cost to procure a basket of similar goods, must be used while comparing GDP per capita between countries.What Does GDP Per Capita Tell You About an Economy?A high GDP per capita usually correlates with a high standard of living, although GDP per capita is highly sensitive to variations in population size.For example, Luxembourg had a total GDP of $64.45 billion, ranking 69th highest in the world. However, given that its population is only about 600,000, its GDP per capita is over $113,000; the highest of any country worldwide.In contrast, China had a total GDP of $27.31 trillion and a GDP pe...