Question

Why do you think average income is an important criterion for development? Explain.

Answer 1

Income is a basic metric for measuring development in different countries. However, total income is not a meaningful measure because the populations of different countries vary. So, when we compare total income, we don’t know how much each person earns, which is known as average income or per capita income. For this reason, we compare average incomes, which are calculated by dividing total income by total population in the countries. That is why average income is a crucial metric for understanding development.