Difference between GDP and GDP Per Capita

GDP and GDP per capita are indices that are used to conduct surveys and give the world rankings of countries based on certain aspects and also shows a gradual increase or decrease of a country’s economy and even the living standards of the population in an individual citizen’s perspective.


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GDP vs GDP Per Capita

The difference between GDP and GDP per capita is that when GDP is calculated to produce the gross value of productivity that a country can produce in an economic year, GDP per capita is used to provide an idea about the lifestyle of the citizens as it gives the value of economic release per individual of the country.

GDP vs GDP Per Capita

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GDP stands for “Gross Domestic Product” and is used to get the economic activity of a country in an overall way calculated for the whole year or even a period that is considered standard internationally.

This is a one way method to indirectly evaluate the country’s world ranking index in terms of its output giving it a gateway to improve productivity and stand as a strong competitor in the developing world.

GDP per capita stands for “Gross Domestic Product per Capita”. It is a way to predict the overall living standards of the population of a country by singling out individual citizens.

This shows the prosperity of the population which indirectly shows the growth of the country.

Comparison Table

Parameters of ComparisonGDPGDP Per Capita
Calculated perYearPerson
Used to FindThe overall productivity of the country.Prosperity and standard of living.
Effect as Population IncreasesIncreases.May decrease or not depending on other factors such as the area of the country.
Calculated UsingIncome, expenditure, production.Dividing the GDP by the total population of the country.
Possible Variation from the Surveyed ValueThere is a bare minimum deviation as it is calculated for the whole country.Individual economic output may vary from one individual to another.

What is GDP? 

GDP is the total economic growth and activity of a country calculated on a yearly basis. The period usually taken to calculate is one year that is considered standard.

GDP is generally calculated every year, but sometimes, to meet the needs of a sudden survey, exceptions are made to calculate the GDP quarterly.

It proves to be the determining element of the overall domestic productivity.

GDP is used to figure out the size of the economy and its growth rate.

Usually, there are three methods to get the GDP. This is by identifying the production, expenditures, or income values of firms.

The most used method is by the use of production. It sums up the output of every enterprise while calculating GDP to figure the total.

The expenditure method evaluates in such a way that all the output products are purchased by a buyer, hence giving the overall value spent by the buyer would turn out to be the amount spent to produce it.

Similarly, the income method usually follows a pre-written statement that the income obtained through the sales of the products must never waver from their original value.

Hence, the calculated sum of the entire product’s income should result in the unadulterated true value of the sales income.

What is GDP per capita? 

Gross Domestic Product per Capita is calculated to get the financial value liberated per person of a country on an average.

As this is calculated per person, it gives a huge idea of the country’s prosperity. This indication helps in recognizing the country’s position in a world index to life quality.

GDP per capita is given by simply dividing the total GDP of that country with total population residing in it.

This is a great way to understand the prosperity of a country and to give a permanent tag to the lifestyle and quality of livelihood for a majority of the citizens.

Countries with a more developed industrial approach and are small but rich might have a greater GDP per capita.

On the other hand, countries with higher GDP but a large population will naturally have a lower GDP per capita.

In other words it is the average of what all the people in that country might earn. But that doesn’t mean that the income of all the citizens is the same.

GDP per capita only gives the upper average of the income of the population.

This might differ for someone below the poverty line and others above the poverty line.

GDP per capita is accepted as the standard and global measure for identifying the prosperity of nations Ms hence in some ways is used to showcase the economic growth of the nation.

GDP per capita shows how much economic production value can be assigned to each citizen.

Main Differences Between GDP and GDP Per Capita

  1. On one hand GDP gives the total value of goods and services produced by a country on a yearly basis, GDP per capita provides the output index calculated per citizen.
  2. GDP could be calculated by considering any of the following values, production, expenditure, or income. To find the GDP per capita of any country, it’s GDP is involved, that is GDP needs to be divided with the actual population of the country.
  3. The GDP per capita can give an idea about the eventual livelihood style of the people could be assessed. But with GDP the prosperity existing among the people couldn’t be deciphered.
  4. GDP can increase given there is a good productivity rate in the country, but for GDP per capita to increase, there should be a definite increase in the population.
  5. Though GDP per capita gives the average economic and financial output per person, the actual economic output might vary amongst the individuals. Whereas, GDP would remain the same for the selected year as it’s the productivity of the country as a whole.
  1. https://www.cambridge.org/core/journals/journal-of-economic-history/article/comparison-of-levels-of-gdp-per-capita-in-developed-and-developing-countries-17001980/B2EE78543292CA758F00E60E6988E23F
  2. https://www.sciencedirect.com/science/article/pii/S0304407605000163
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