Average propensity to consume (APC) is the percentage of income spent. To find the percentage of income spent, one needs to divide consumption by income, or .
Sometimes, disposable income is used as the denominator instead, so ,
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- where C is the amount spent, Y is pre-tax income, and T is taxes.
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The inverse is the average propensity to save (APS).
Average propensity to consume (APC) is the percentage of income people desire to spend.
It is key to note that Average Propensity to Consume (APC) is very different from Marginal propensity to consume (MPC). These two values are often confused.
Famous quotes containing the words average, propensity and/or consume:
“A two-week-old infant cries an average of one and a half hours every day. This increases to approximately three hours per day when the child is about six weeks old. By the time children are twelve weeks old, their daily crying has decreased dramatically and averages less than one hour. This same basic pattern of crying is present among children from a wide range of cultures throughout the world. It appears to be wired into the nervous system of our species.”
—Lawrence Kutner (20th century)
“The propensity to truck, barter and exchange one thing for another ... is common to all men, and to be found in no other race of animals.”
—Adam Smith (1723–1790)
“Here in the U.S., culture is not that delicious panacea which we Europeans consume in a sacramental mental space and which has its own special columns in the newspapers—and in people’s minds. Culture is space, speed, cinema, technology. This culture is authentic, if anything can be said to be authentic.”
—Jean Baudrillard (b. 1929)