US per capita GDP is approximately $70K. The current average number of members of household is in the US is 3.13. Average household income is approximately $74K. How can this be?
GDP per capita and average family income are two distinct indicators used to evaluate economic performance. Each has its advantages and disadvantages, which vary based on the specific question and context.
GDP per capita is a measure of a country's economic output relative to its population size. It is calculated by dividing the country’s total GDP, as reported in the census, by the total population. This metric is commonly used to assess a country's economic health and its citizens' quality of life. However, it may not always be the most accurate indicator of an economy's performance. GDP per capita does not account for non-market activities such as household chores, informal transactions, the second-hand goods market, and transfer payments like unemployment benefits and social security.
On the other hand, average family income sums up the incomes of all families and divides by the number of families. Unlike GDP per capita, it does not include non-family households. It specifically considers households with two or more individuals related by birth, marriage, or adoption. Additionally, average family income data is typically gathered from household surveys, whereas GDP per capita is derived from national accounts.