What is Per capita income?
- Content Type:
- Glossary
Per capita income Definition
The average amount of income per person in a population, regardless of age or labor force status. It is derived by dividing the total income by the total population.
Per capita income is the average income earned per person in a specific geographic area, typically calculated by dividing total income by the population. In marketing research, it serves as an economic indicator used to assess consumer purchasing power and market potential across regions or demographic segments.
What are the key aspects of per capita income in marketing research?
- Represents average income per individual.
- Calculated for cities, regions or countries.
- Used as a proxy for economic well-being.
- Influences demand for products and services.
- Can be compared across time or geographic areas.
- Often used alongside other socioeconomic data.
Why is per capita income important in market research?
Per capita income provides a snapshot of economic conditions and spending power within a population. It helps researchers evaluate market viability, tailor pricing strategies and understand the affordability of products. It also supports segmentation and targeting decisions for both local and global campaigns.
Who relies on per capita income in marketing research?
- Consumer insights teams assessing market potential.
- Brand managers setting regional pricing strategies.
- Retailers choosing store locations.
- Media planners allocating advertising budgets.
- Product developers evaluating affordability thresholds.
- Public sector researchers and policymakers.
How do market researchers use per capita income?
Market researchers use per capita income to evaluate the economic profile of different regions or target audiences. By analyzing this data, they can estimate purchasing power, determine which markets are most viable for certain products and shape pricing strategies accordingly. It’s especially useful in geographic segmentation, where differences in income levels may influence consumer preferences, brand sensitivity or promotional responsiveness. Researchers often combine this metric with other variables like population density, education or spending habits to build richer, more actionable market profiles.