– Mississippi has similar GDP per capita ($53061) than Germany ($54291) and the UK ($51075), so why are people in Mississippi so much poorer with a much lower living standard?

Question

I was surprised to learn that poor states like Mississippi have about the same gdp per capita as rich developed countries. How can this be true? Why is there such a different standard of living?

In: Economics

Answer 1

GDP per capita just measures the size and strength of an economy. It does not take into account things like educational obtainment, or crime, or life expectancy, etc. Higher GDP tends to correlate with higher quality of life but not perfectly. If you’re looking to compare, the most commonly used measure of quality of life is HDI.