Why is it a mistake to equate statewide GDP per capita with an individual’s earnings?
Note
A statewide GDP-per-person figure cannot establish the income or living conditions of an individual New Jersey resident.
Dividing aggregate output by all residents creates an arithmetic ratio, not a sample of individual paychecks. Profits, capital depreciation, business taxes, commuters, and unequal incomes prevent an earnings interpretation. Distributional information is required before drawing conclusions about the economic experiences of individual residents.
