Editing Per capita income (section)

==Limitations==
While per capita income can be useful for many economic studies, it is important to keep in mind its limitations.
* Comparisons of per capita income over time need to consider inflation. Without adjusting for [[inflation]], figures tend to overstate the effects of economic growth.
* International comparisons can be distorted by cost of living differences not reflected in exchange rates. Where the objective is to compare living standards between countries, adjusting for differences in [[purchasing power parity]] will more accurately reflect what people are actually able to buy with their money.
* It is a [[mean]] value and does not reflect [[income inequality|income distribution]]. If a country's income distribution is skewed, a small wealthy class can increase per capita income substantially while the majority of the population has no change in income. In this respect, [[median income]] is more useful when measuring of prosperity than per capita income, as it is less influenced by outliers.
* Non-monetary activity, such as barter or services provided within the family, is usually not counted. The importance of these services varies widely among economies.
* Per capita income does not consider whether income is invested in factors likely to improve the area's development, such as health, education, or infrastructure.