What does "GDP per capita" measure?

GDP per capita measures the average economic output per person in a given area, typically a country. It is calculated by taking the Gross Domestic Product (GDP) of a country, which represents the total value of all goods and services produced over a specific time period, and dividing it by the population of that country. This metric provides insight into the economic performance of a nation on a per-person basis, allowing for comparative analysis between different countries or regions.

By focusing on GDP per capita, one can gain a clearer understanding of the standard of living and economic health of the population, beyond just the total economic output. It highlights how wealth is generated in the economy relative to the number of people, thus serving as a useful tool for economists and policymakers when assessing economic prosperity and planning for growth.