Measuring a country’s economic growth at regular intervals is a critical task for any progressive country. Certain scales, such as GDP and GDP per capita, are used to carry out this process of measuring economic growth. Although both of these scales measure a country’s economic abundance, it is critical to distinguish between the two. While GDP talks about the entire country, GDP Per Capita talks about citizens.
GDP vs GDP Per Capita
The main difference between GDP and GDP Per Capita is that the GDP is a scale that measures economic growth about the entire country. Whereas GDP Per Capita is a scale that measures economic growth about the population. However, the latter is a similar scale that measures economic growth. But it concerns the entire population instead of concerning the entire country at large.
GDP is an abbreviation for Gross Domestic Products. It refers to a situation in which the entire amount of goods and services created in a country over a specific time is calculated. This particular measurement is generally performed once or twice a year. It depicts the overall economic growth of the country. It is a standard measurement scale that is accepted worldwide.
GDP per capita, on the other hand, is derived from the original GDP. However, it differs from GDP in some ways. Simply put, GDP per capita is the amount obtained when dividing the GDP by the total population of a country. This scale typically measures the economic growth of each citizen of the country. It focuses more on the individual growth of the economy.
Comparison Table Between GDP and GDP Per Capita
| Parameters of Comparison | GDP | GDP Per Capita |
| Meaning | It refers to the entire amount of goods and services created in a country. | It refers to the value that is obtained after dividing GDP from the population. |
| Time interval | It is measured about the time. | It is measured about the person rather. |
| Measured by | To calculate this phenomenon, income and expenditure are taken into account. | To calculate this phenomenon, GDP is divided by the whole population. |
| Used for | This particular scale determines, how economically sound a country is. | This particular scale determines, how prosperous the living standards of the citizen are. |
| Variation from the data | As the data is collected for the entire country, it rarely deviates. | As the data is collected for every person, the results may vary from person to person. |
What is GDP?
GDP stands for gross domestic products. It refers to a system in which the total amount of goods and services produced in a country over a specific period is assessed to determine the country’s economic growth on a scale. The majority of the time, GDP is measured every year. However, if the need arises, GDP can also be assessed every quarter.
When calculating GDP, some specific factors are taken into account. Such as – total country production, industry spending, and so on. All of these calculations are made to determine how much growth the country has had over a specific period. In calculating this particular phenomenon, not only products but services are also considered. Anything that does not fall into the category of products can also be considered if it falls under the category of services.
GDP is not just a tool for any country to know the direction of its economic growth. But it also serves as a tool for other nations to ascertain the economic value and growth of a given country. Therefore, this scale holds utmost significance in almost all parts of the world as it is more of a universal scale.
What is GDP Per Capita?
When the GDP of a country is determined and then divided by the country’s complete population, the result is known as GDP per capita. This statistic is used to assess the economic progress of every person that lives in a country. It indicates the economic prosperity of persons living in a country.
GDP per capita is an excellent tool to track a country’s economic development for individual citizens. This scale enables any country to determine the level of prosperity and abundance among its population. The method for calculating this amount is similarly extremely straightforward. The country’s total GDP is divided by the country’s total population.
GDP per capita is also accepted all across the world as a classic measurement of a country’s economic growth. But sometimes, there may be variations in the result. As this particular phenomenon is measured for every person, the result may also vary from every person, and therefore there is some ambiguity in the results sometimes.
Main Differences Between GDP and GDP Per Capita
- GDP showcases the economic growth of a country at large. While on the other hand, GDP Per Capita showcases the economic growth of a person at once.
- GDP is calculated after taking the income and expenditure of the country. While on the other hand, GDP Per Capita is calculated after dividing GDP from the population.
- GDP measures how economically sound a country is. While on the other hand, GDP Per Capita measures how prosperous the living standards of a country are.
- GDP happens to be an inaccurate scale as it measures the country at large. While on the other hand, GDP Per Capita sometimes deviates as the results may vary from person.
- GDP is calculated in relation to time. While on the other hand, GDP Per Capita this calculated in relation to the person.
Conclusion
Numerous measurement scales are used to measure various phenomena in any country. But because the economy of any country is the most important among all possible phenomena, certain scales are also used to measure economic growth. To understand the effect of different factors on the economy, different measuring scales are used.
GDP and GDP Per Capita are the two most well-known of these popular scales. GDP is the amount obtained after taking into account a country’s income and expenditure over a given period. GDP Per Capita, on the other hand, reveals the economic status of any individual in that country. Both of these scales are very similar to one another, but numerous differences can be easily identified.
References
- 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
- https://www.sciencedirect.com/science/article/pii/S0304407605000163