GDP vs GDP Per Capita: Difference and Comparison

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 show a gradual increase or decrease in a country’s economy and even the living standards of the population from an individual citizen’s perspective.

Key Takeaways

  1. Gross Domestic Product (GDP) measures the total value of goods and services produced within a country, while GDP per capita divides GDP by population.
  2. GDP is a measure of a country’s overall economic output, whereas GDP per capita indicates individual prosperity and living standards.
  3. Comparing GDP per capita across countries provides a more accurate picture of relative wealth and economic well-being than comparing GDP alone.

GDP vs GDP Per Capita

GDP is an indicator of a country’s economic health and growth, indicating a stronger economy with more goods and services being produced. GDP per capita measures the average economic well-being of a country, with higher GDP per capita indicating a higher standard of living.

GDP vs GDP Per Capita

GDP stands for “Gross Domestic Product” and is used to get a country’s economic activity in an overall way calculated for the whole year or even a period 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 a country’s population by singling out individual citizens.

This shows the population’s prosperity, which indirectly shows the country’s growth.

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 taken to calculate is one year which is considered standard.

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

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

GDP is used to determine the economy’s size and growth rate.

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

The most used method is 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 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 average.

This is calculated per person, giving a huge idea of the country’s prosperity. This indication helps recognise the country’s position in the world life quality index.

GDP per capita is given by simply dividing that country’s total GDP by its total population.

This is a great way to understand a country’s prosperity and give a permanent tag to the lifestyle and quality of livelihood for most 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 GDPs 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.

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

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

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

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 the one hand, GDP gives the total value of goods and services produced by a country on a yearly basis, and 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, its 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 the country’s good productivity rate, 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 individuals. Whereas GDP would remain the same for the selected year as it’s the productivity of the country as a whole.

Last Updated : 13 July, 2023

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14 thoughts on “GDP vs GDP Per Capita: Difference and Comparison”

  1. The article thoroughly explains the differences between GDP and GDP per capita. It is a must-read for anyone interested in economics.


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