What does GDP per capita reflect?

GDP per capita is a metric that indicates the average economic output per person in a country. It is calculated by dividing the country's gross domestic product (GDP) by its population. This figure gives a more accurate representation of the economic welfare and standard of living of the average citizen, as it takes into account both the total economic output of the country and its population size.

By providing an average that reflects the distribution of economic activity among the population, GDP per capita allows for comparisons between different countries and regions, regardless of their total GDP. This is especially useful for understanding how wealth is generated and shared within a population, as it highlights economic performance relative to the number of individuals living in that area.

In contrast, the total production of goods in a nation focuses solely on the overall economic activity without considering the population. The ratio of population to employment does not directly relate to economic output and instead pertains to employment levels. Lastly, referring simply to the gross domestic product for the overall economy also does not provide the individual context that GDP per capita does.