Richer countries tend to live longer, learn more and have more choice. Income per head matters.
Why GDP per capita is useful
More goods and services
More real income per person: more to spend.
More jobs
Growing output usually needs more workers.
More tax revenue
Pays for schools, hospitals and transfer payments.
The points to remember
- Use real (inflation removed) and per capita (per person) figures.
- GNI can be better than GDP where much income flows in from, or out to, other countries.
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But an average can hide a lot.
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What GDP per capita misses
Inequality
An average says nothing about who gets the income.
Unpaid and informal work
Care, housework and cash jobs are not counted.
The environment
Pollution and used-up resources are not subtracted.
What is produced
Weapons count the same as schools; leisure counts for nothing.
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Composite measures add health, education and how people feel.
Other ways to measure well-being
| Measure | What it combines |
|---|---|
| Human Development Index (HDI) | Health (life expectancy), education (years of schooling), income (GNI per capita at PPP) |
| OECD Better Life Index | Eleven areas, such as housing, jobs, environment, safety and work-life balance |
| Happiness Index | People's own rating of their lives, from surveys |
| Happy Planet Index | Well-being and life expectancy, set against the country's ecological footprint |
Remember it as: Income is one part of well-being, not all of it.
Paper 1 asked this in May 2025, as part (b) for 15 marks.
Using real-world examples, discuss the usefulness of real gross domestic product (GDP) per capita as an indicator of economic well-being.
Model answer plan
See the answer broken into clear points, with guidance on how each point earns marks.
How the 15 marks are given
| Marks | What your answer needs |
|---|---|
| 13–15 | Theory fully explained, terms right all the way through, balanced evaluation, real examples fully developed to support the argument |
| 10–12 | Theory explained, terms mostly right, evaluation mostly balanced, real examples developed |
| 7–9 | Theory partly explained, some evaluation but one-sided, examples partly developed |
| 4–6 | Theory only described, evaluation superficial, examples only named |
| 1–3 | Theory stated but not relevant, no evaluation |