Which Country Has the Highest Income Per Capita in the World?
There are two main ways in which one can determine which country has the highest income per capita. One can look at the Gross Domestic Product (GDP) at its Purchasing Power Parity (PPP), or one can look at what is called its nominal GDP. Although different assessments and different methods reach different conclusions for every spot below the top, it is mostly undisputed that the country with the highest income per capita, by any measure, is Luxembourg.
First we’ll look at the nominal GDP for the top countries, to see how Luxembourg stacks up against the competition in per capita income. Nominal GDP is determined by simply taking the value of all services and all goods that occur in a given year, and dividing it by the number of people living in the country. There is no attempt to compensate for the fact that a certain amount of money might buy more in one country than another, so these numbers aren’t a very good predictor of how much the GDP per capita is worth locally.
In nominal GDP, Luxembourg comes out with the highest income per capita at roughly $88,000 US Dollars (USD). The number two country, Norway, comes well behind, at around $72,300 USD. Following Norway is Qatar with roughly $62,900 USD. The United States comes eighth, with just around $44,200 USD, a bit more than half the per capita income of Luxembourg, as measured in nominal GDP.
GDP at PPP is a considerably more useful marker of wealth, but is open to more estimation, and therefore rankings differ based on who prepares them. Purchasing Power Parity is based on the idea that in a healthy global economy, any given good will have roughly the same price. That means that if the prices seem to differ, it is because the value of currency differs between the two countries. By looking at certain benchmark items, such as a loaf of bread, or a Big Mac hamburger, economies can be normalized among themselves, allowing for a better comparison between nations. Because any item can be chosen, however, and because the way of measuring costs of those items may differ, various groups come up with different scales of PPP.
There are three major groups that offer good numbers on who has the highest income per capita in GDP at PPP: the CIA, the University of Pennsylvania, and the International Monetary Fund (IMF). In all three of these studies, Luxembourg comes out as having the highest income per capita, although the exact number differs between them. Different groups also may choose to include or not include dependencies and territories, such as Bermuda, as independent of their respective nations.
The CIA places Luxembourg first at roughly $71,400 USD, followed by the territory of Bermuda at $69,900 USD. Next comes the dependency of Jersey at $57,000 USD. The second-ranked nation, however, is Equatorial Guinea at $50,200 USD. Third is the United Arab Emirates, at $49,700 USD. And rather than second, as in the nominal GDP, in this assessment Norway comes fourth, at $46,300 USD. The United States comes in at sixth, with a GDP at PPP of $43,800, considerably more than half of Luxembourg’s GDP at PPP.
The University of Pennsylvania also places Luxembourg first in GDP at PPP, with roughly $54,300 USD. Next comes the United States, at $39,500 USD. Norway is the third-highest nation, with $37,400 USD, and the United Arab Emirates is right behind, at $33,400 USD. In this assessment Equatorial Guinea comes in 60th, rather than second, with a GDP at PPP of $10,300 USD.
Lastly, the IMF data, which looks only at members of the IMF, and Hong Kong, places Luxembourg first with a per capita income of $81,500 USD. Ireland comes in second with a GDP at PPP of $44,676 USD, just barely ahead of Norway at $44,648 USD. The United States is ranked fourth, at $43,200 USD, and Equatorial Guinea is again far from the top of the list at 43rd, with a GDP at PPP of $18,200 USD.
As is clear, the rankings are far from perfect, and depending on the group and mode of assessment, some countries rise or fall by many ranks. However, even with these disparities, Luxembourg is clearly the nation with the highest income per capita, by any standard, and by an incredibly large margin.
First and foremost, poor people have it better in America than a working stiff. Indigomoth posted a broken bone cost your life savings. False. In America, they cannot turn you away from a hospital. You will get your cast. A poor person pays nothing. A guy with a job pays $500.
I prefer to look at a bigger picture than this when talking about the best places to live. I mean, Luxembourg might have higher incomes but it's really expensive to live there.
And besides that, money isn't everything. I know a lot of people would probably prefer to live on a poor, tropical island where they could swim in the ocean every day and hang out with their neighbors in peace, rather than live in a stuffy gated community, where they earn lots of money but very little happiness.
Those are extreme examples, of course, but I do think that a higher average income per capita doesn't say much about quality of life.
@anon212262 - Honestly, I would have to disagree with you there. Having traveled a lot and lived in both places, there are definitely spots in Europe that would be better to live in long term than the States.
That's true if you're at an average income level, it becomes even more true if you are under it. People from Europe don't realize how scary it can be to live in the United States, where, if you don't have health insurance, a broken bone can cost you your life's savings. There's just no protection for poor people.
Of course, Europe is a big place with a lot of different countries, so this isn't a completely fair comparison, just like the highest per capita income levels don't tell you much either.
Norway is an expensive country to live in. The salaries are higher, but it simply cost a lot more to purchase. For example, a hamburger at McDonald's costs 60 percent more than in London, New York, Stockholm or Paris.
USA is the best place to live. I'm from europe and I can tell the difference. Numbers are good only on paper.
I have two comments to add. First, Luxembourg is not 'undoubtedly' number 1. Luxembourg, being a very small country, has about 43 percent of its work force not living inside the country - but commuting in every day from neighboring france, belgium and germany.
So, if you divide the nominal gdp of the country by the people living inside the country, the per capita gdp is massively overrated. you should adjust that number and divide gdp by the whole work force that accounts for this gdp and you end up at about 59k nominal gdp per capita instead of 104k USD in 2010.
Second, GDP in PPP is a total misconception. Nominal GDP takes all products that are being produced in a country into account, at world market values. But consumer prices that are the basis for PPP evaluation are not only driven by GDP but also by international saving.
Countries with balance of payment surpluses have usually high consumer prices due to the fact that they don't consume everything they could at the moment. This self restriction leads usually to higher consumer prices - but also to savings! So PPP measures the value of consumed goods regardless of if these goods have been produced by the consumers themselves or if they have bought them taking credits abroad - which from my point of view would be a huge difference.
which country is the best for earning income with family, or which country is best to immigrate by income from business?
should i know that the highest GDP country has the highest income earning or not?
qatar has actually shifted quite a bit since the last update of the cia world factbook, which now places qatar 2nd in terms of GDP/capita PPP, at roughly $75,100 (luxembourg has since risen to $80,800). 2007 estimates aren't out for bermuda yet, so it remains to be seen how much the cia will track its growth at (they are still using 2004 estimates).
In your article you state, The CIA places Luxembourg first at roughly $71,400 USD, followed by the territory of Bermuda at $69,900 USD. Next comes the dependency of Jersey at $57,000 USD. The second-highest income per capita nation, however, is Equatorial Guinea at $50,200 USD. Third is the United Arab Emirates, at $49,700 USD. And rather than second, as in the nominal GDP, in this assessment Norway comes fourth, at $46,300 USD. The United States comes in at sixth, with a GDP at PPP of $43,800, considerably more than half of Luxembourg’s GDP at PPP.
Where does Qatar fit into this model?
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