Question

Explain the limitations of average income for comparing different countries with examples.

Answer 1

1. Does Not Show Income Inequality: Per capita income is only an average value and does not show how income is distributed among the population. A country may have a high average income, yet most of the wealth could be concentrated in the hands of a few, while a large section of people remains poor.
2. Ignores Other Aspects of Development: Development involves more than just income; it also includes factors like education, healthcare, gender equality, and overall quality of life. Therefore, a country with high income but poor health and education facilities cannot be considered truly developed.