Per Capita Income (PCI) is one of the most widely used indicators for gauging the economic performance and changing fortunes of local economies. It is used as a yardstick to assess the economic well being of a region's residents and the quality of consumer markets. It serves as a barometer for calibrating the economic performance of a region over time and to judge differences in relative economic prosperity between regions. Shifting trends in local per capita income growth have important social and political ramifications and significant implications in formulating local economic development strategies and initiatives.

Personal income is measured as a flow throughout the year, while the measurement of population is at one point in mid-year. Therefore, per capita income is distorted if a significant change in population occurs during the year.

For smaller counties in particular, per capita income in any given year may be exceptionally high or low for the short run because of unusual local conditions, such as a bumper crop, a catastrophe, or a major construction project as the building of a dam or nuclear power plant.

Farm incomes are notorious for being especially volatile year-to-year, owing to changing weather, commodity market conditions, and alterations in government programs. Therefore, the per capita income of farm-dependent counties may exhibit sharp fluctuations over time.

The presence of large institutional populations--such as residents attending a local college or the residents of a local prison or state mental institution--can significantly lower the per capita income estimates of an area. Such results may not reflect the relative economic well being of the non-institutional population and may mislead if care is not given to their interpretation.

Figure 1 depicts Palo Alto County's annual per capita personal income over 1970-2022 in current and constant (2017) dollars. Constant dollar measurements remove the effects of inflation. They allow for comparison of changes in the real purchasing power of Palo Alto County over time.

When measured in current dollars, Palo Alto County's per capita personal income increased 1,621.79%, from $3,780 in 1970 to $65,080 in 2022. When measured in constant 2017 dollars to adjust for inflation, it advanced 193.28%, from $19,123 in 1970 to $56,082 in 2022.

Figure 2 tracks Palo Alto County's and Iowa's annual real per capita personal income for the period 1969-2022 to illustrate real per capita personal income patterns over time. During this 54-year period, Palo Alto County's real per capita personal income rose from $18,531 in 1969 to $56,082 in 2022, for a net gain of $37,551, or 202.64%. In comparison, Iowa's real per capita personal income advanced from $19,586 in 1969 to $51,897 in 2022, for a net gain of $32,311, or 164.97%.

Figure 3 shows Palo Alto County's real per capita personal income growth in a broader context by offering direct comparisons across time with Iowa, the United States. The growth indices shown here express each region's real per capita personal income in 1969 as a base figure of 100, and the real per capita personal incomes in later years as a percentage of the 1969 base figure. This method allows for more direct comparison of differences in real per capita personal income growth between regions that may differ vastly in size.

Palo Alto County's overall real per capita personal income growth was 202.64% over 1969-2022 outpaced Iowa's increase of 164.97%, and topped the United States' increase of 171.04%.

Figure 4 displays the trends for per capita personal income relative to the national average by tracing Palo Alto County and Iowa per capita personal income as a percent of the national average over 1969-2022.

In 1969, Palo Alto County's per capita personal income amounted to 89.03% of the national average; in 2022, it approximated 99.40%. Similarly, in 1969, Iowa's per capita personal income totaled 94.09% of the national average; in 2022, it consisted of 91.98%.

Figure 5 highlights the short-run pattern of Palo Alto County's real per capita personal income growth by tracking the year-to-year percent change over 1970-2022. The average annual percent change for the entire 53-year period is also traced on this chart to provide a benchmark for gauging periods of relative high--and relative low--growth against the backdrop of the long-term average.

On average, Palo Alto County's real per capita personal income grew at an annual rate of 2.71% over 1970-2022. The county posted its highest growth in 1973 (38.38%) and recorded its lowest growth in 2009 (-18.18%). In 2022, Palo Alto County's real per capita personal income grew by 5.33%

Over the past five decades some counties have experienced extreme swings in growth, and often such swings have tended to coincide with the decades themselves. Figure 6 again depicts the annual percent change in Palo Alto County's real per capita personal income since 1970, but this time they are displayed with average growth rates for the decade of the 1970s, 1980s, 1990s, 2000s, 2010s, and 2020-2022.

During the 1970s, Palo Alto County's annual real per capita personal income growth rate averaged 3.31%. It averaged 1.55% in the 1980s, 2.33% throughout the 1990s, 3.14% during the 2000s, 2.17% throughout the 2010s, 6.15% thus far this decade (2020-2022).

Figure 7 compares the decade average growth rates for Palo Alto County noted in the previous graph with the corresponding decade averages for Iowa and the nation. As the chart reveals, Palo Alto County's average annual real per capita personal income growth led Iowa's average in the 1970s (3.31% vs. 2.88%), outpaced Iowa's average in the 1980s (1.55% vs. 1.39%), registered above Iowa's average throughout the 1990s (2.33% vs. 2.03%), registered above Iowa's average during the 2000s (3.14% vs. 1.64%), surpassed Iowa's average in the 2010s (2.17% vs. 1.38%), and recorded above Iowa's average over the 3 year period of the current decade, 2020-2022 (6.15% vs. 2.72%).

Finally, relative to nationwide real per capita personal income growth trends, Palo Alto County recorded above the nation during the 1970s (3.31% vs. 2.37%), recorded underneath the nation during the 1980s (1.55% vs. 2.19%), registered above the nation during the 1990s (2.33% vs. 2.01%), topped the nation in the 2000s (3.14% vs. 1.10%), exceeded the nation over the 2010s (2.17% vs. 1.97%), and topped the nation over 2020-2022 (6.15% vs. 1.78%).