Q.What is the relationship between population and per capita income?

Per Capita Income = National Income ÷ Population. Hence per capita income depends on both national income and the size of the population. For a given national income, a rise in population lowers per capita income and a fall in population raises it — an inverse relationship. Per capita income rises only when national income grows faster than population. ## The relationship Per capita income means the average income of a person in a country. It is found by the formula: Per Capita Income = National Income / Total Population. From this formula it is clear that per capita income depends on two things — the size of national income and the size of the population. ## Effect of population on per capita income - If national income remains constant and population increases, per capita income falls; if population decreases, per capita income rises. In this sense population and per capita income are inversely (negatively) related. - If population remains constant and national income increases, per capita income rises. - When both change: per capita income rises only if national income grows faster than population; it falls if population grows faster than national income. ## Importance for a developing country In a country like India, national income does grow, but if the population grows at a high rate, much of the increase in income is 'eaten up' by the extra population, so per capita income and the standard of living improve only slowly. This is why controlling population growth is important for raising per capita inc …