<p>Per capita availability of capital very strongly correlates with GDP per capita. GDP measures all economic activity and the capital is the input to this activity. </p>

<p>So your question is pretty much an extension of </p>

<blockquote>
  <p>How is energy consumption related to GDP?</p>
</blockquote>

<p>Well, if not for differences in energy efficiency, GDP would be determined by energy consumption.</p>

<p>In a globalized world most businesses and countries have similar energy efficiencies, and if they do differ, poor countries have consistently lower energy efficiency. This preserves a neat correlation between GDP and energy consumption.</p>

<p>There is so much empirical evidence of it that it is pretty much a rule. </p>

<p>You can browse <a href="https://www.google.com/search?q=correlation+between+energy+consumption+and+gdp&amp;dcr=0&amp;source=lnms&amp;tbm=isch&amp;sa=X" rel="nofollow noreferrer">Google image search</a> to see the evidence of it.</p>

<p>Many poor countries lack statistical apparatus to measure their GDP and use data like electricity consumption to estimate their GDP every year.</p>

CC BY-SA 3.0
2018-04-09T11:44:48.883Z
2018-04-09T11:44:48.883Z
Arthur Tarasov
<blockquote>
  <p><strong>"An important indicator of low capital per head available in developing countries is the consumption of energy"</strong>. I could not decipher the concept.</p>
</blockquote>

<energy-economics><capital>
How can energy consumption be an indicator of per capita availability of capital?
Anjuna
# How can energy consumption be an indicator of per capita availability of capital?

(Asked by: username_0 on 2018-04-09)

> **"An important indicator of low capital per head available in developing countries is the consumption of energy"**. I could not decipher the concept.

**Tags:** energy-economics, capital

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## 1 answers

### Answer by username_1 on 2018-04-09. Score: 1

Per capita availability of capital very strongly correlates with GDP per capita. GDP measures all economic activity and the capital is the input to this activity.

So your question is pretty much an extension of

> How is energy consumption related to GDP?

Well, if not for differences in energy efficiency, GDP would be determined by energy consumption.

In a globalized world most businesses and countries have similar energy efficiencies, and if they do differ, poor countries have consistently lower energy efficiency. This preserves a neat correlation between GDP and energy consumption.

There is so much empirical evidence of it that it is pretty much a rule.

You can browse [Google image search](https://www.google.com/search?q=correlation+between+energy+consumption+and+gdp&dcr=0&source=lnms&tbm=isch&sa=X) to see the evidence of it.

Many poor countries lack statistical apparatus to measure their GDP and use data like electricity consumption to estimate their GDP every year.


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