Hi.

 

Does a higher population result in lower per capita income?

 

If so, how does this occur exactly?

 

 

Thanks,

Mr Rayon

Not necessarily, but if total income is the same then it will.

Does a higher population result in lower per capita income?

I doubt there is a every simple relationship here, but I do not know.

 

Have you got hold of some statistics here? I assume there is a plot somewhere of population Vs GDP? If so can you point to it or post it here?

Does a higher population result in lower per capita income?

 

If you plot a graph of GDP per capita against population, there doesn't seem to be any clear relationship. And if you look at how India and China's populations have increased with no change in GDB per capita it seems to confirm that:

http://www.gapminder.org/tools/bubbles#_state_time_value=1808;&marker_axis%2F_y_which=gdp%2F_p%2F_cap%2F_const%2F_ppp2011%2F_dollar&domainMin:300&domainMax:140000&zoomedMin:300&zoomedMax:140000&scaleType=log;&axis%2F_x_which=population&domainMin:14000&domainMax:1400000000&zoomedMin:14000&zoomedMax:1400000000&scaleType=linear;&size_which=gdp%2F_p%2F_cap%2F_const%2F_ppp2011%2F_dollar&scaleType=log

And why is this in Speculations?

Per capita income, is average income.

 

If you have 1 mln people earning $1, and 1 person earning $1 mln,

Their total earnings is 1*1000000+1000000 = 2 mln.

But quantity of people is 1000001.

2 mln / 1000001 = 1.999998 per capita income.

At the same time, median would be $1, as extremities are ruled out.

Edited March 23, 20169 yr by Sensei

Per capita income, is average income.

 

If you have 1 mln people earning $1, and 1 person earning $1 mln,

Their total earnings is 1*1000000+1000000 = 2 mln.

But quantity of people is 1000001.

2 mln / 1000001 = 1.999998 per capita income.

At the same time, median would be $1, as extremities are ruled out.

 

Indeed - a very important point. Statistics are both very important and very dangerous when describing society. You really need the mean, median, sd and skew - and by that point the person listening to the news programme or reading the web article has moved on to the next item that doesn't have all those confusing numbers.