There are 6.7 billion people on earth. And while the global economy is now measured in the tens of trillions of dollars each year, we wonder: On a worldwide basis, what is the average income per person? Is it:
A. $1,700 is not correct.
The median income per person is about $1,700 (as of 2005). That means that half of the world's population lives in countries with per capita incomes less than that, while the other half lives in richer countries. As of 2005, China's income — at $1,721 per person — was near the world median (according to World Bank data).
However, the average income per person is much higher. It is pulled up by the comparatively high incomes of the 15% of the world's population that lives in Western Europe, North America and North Asia.
B. $7,000 is correct.
The world's average income — total world income divided by total number of people — is about $7,000. And even though this is the average level of income, only about 19% of the world's population lives in countries with per capita incomes at least this high.
Countries with an average income around this level include Mexico, Chile and Latvia. They rank around 40th place in the global income table.
C. $18,500 is not correct.
Looking ahead to the mid-21st century, with population growth rates falling and incomes growing in most countries — and increasing very rapidly in the two biggest countries, China and India — one can reasonably expect world average income to reach about $18,500 in 2050.
Currently, Portugal, Greece and Israel have an average income at or around that level. These nations rank around 25th place in the global income table.
Although incomes in poor countries can be expected to grow more rapidly than in rich countries, there will still be significant income differences by mid-century. In fact, income levels in today's rich countries are likely to top $70,000 per capita (in 2005 dollars), while incomes in sub-Saharan Africa are still likely to be below $3,000 in 2050.
D. $35,000 is not correct.
As of 2005, people living in rich countries had an average income of about $35,000. The high incomes in these countries make the world average income four times larger than the world median income.
It is unlikely that, even by 2050, average incomes in the former Soviet bloc, East Asia or Latin America will have reached the levels that those living in rich countries enjoy today.