Why per Capita income is not a good measure of material well being of people?

Per capita income is not a good measure of material well-being of people for several reasons:

1. It does not account for income inequality: Per capita income averages out the income of a population, but it does not take into account how that income is distributed among individuals. A country with a high per capita income may still have a large proportion of its population living in poverty if income is concentrated in the hands of a few wealthy individuals.

2. It does not consider cost of living: Per capita income does not take into account the cost of living in different regions or countries. A high per capita income in one country may not necessarily translate to a high standard of living if the cost of goods and services is also high.

3. It does not capture non-monetary aspects of well-being: Material well-being is not solely determined by income. Factors such as access to healthcare, education, housing, and social services also play a significant role in determining the overall well-being of individuals. Per capita income does not capture these non-monetary aspects of well-being.

4. It does not account for informal economy: Per capita income typically only measures formal income earned through official channels. It does not account for income earned through informal or under-the-table means, which can be significant in some countries.

Overall, per capita income is a limited measure of material well-being and should be used in conjunction with other indicators to provide a more comprehensive understanding of the economic and social conditions of a population.

Per capita income is not a good measure of material well-being of people because it does not account for the following factors:

1. Income Distribution: Per capita income only measures the average income of a population, not how the income is distributed among individuals. It is possible to have a high per capita income but still have a large gap between the rich and the poor. For example, in some countries, a small percentage of the population may have very high incomes, while the majority of people live in poverty.

2. Cost of Living: Per capita income does not take into account the cost of living in different locations. The same amount of income may have different purchasing power in different countries or regions. For example, a person with a per capita income of $10,000 may live comfortably in a low-cost country, but may struggle to make ends meet in a high-cost country.

3. Access to Basic Services: Per capita income does not reflect the availability or quality of basic services, such as healthcare, education, housing, and infrastructure. Even if a country has a high per capita income, these services may be inaccessible or inadequate for a significant portion of the population.

4. Environmental Sustainability: Per capita income does not account for the environmental impact of economic activity. A high per capita income may be achieved through unsustainable practices that deplete natural resources or damage the environment.

5. Social and Political Factors: Per capita income does not measure social and political factors that can affect well-being, such as political stability, freedom, human rights, and social cohesion. These factors can have a significant impact on people's quality of life.

Therefore, while per capita income can provide a general overview of the economic well-being of a population, it is not a comprehensive measure of material well-being. Other indicators, such as the Human Development Index (HDI) or the Genuine Progress Indicator (GPI), provide a more holistic assessment of people's well-being by considering factors such as health, education, environmental sustainability, and social justice.