Per Capita Income, Personal Income and Disposable Income

Per Capita Income (PCI) expresses national income on an average, per-person basis, and is widely used to compare the standard of living across countries or over time:

Because PCI divides total income by population, a country's total national income can rise while its PCI stays flat or even falls, if population grows at least as fast as national income — this is a key reason PCI is a better welfare indicator than the absolute size of national income alone.

National Income is an aggregate concept — it does not directly tell us how much income actually reaches households. Two further, related concepts refine this:

Personal Income (PI) is the total income actually received by individuals/households, whether earned by them or not:

(Corporate tax, undistributed profits and social-security contributions are earned by/for firms and the government but never actually paid out to individuals, so they are deducted; transfer payments such as pensions and scholarships are received by individuals without any corresponding current production, so they are added back.)

Personal Disposable Income (PDI) is what a household is actually free to spend or save, after direct taxes and other compulsory payments: …