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:
“Always remember that a child doesn’t have to be average to be normal. Children with very different temperaments can be equally successful.”
—Lawrence Kutner (20th century)
“The source of our actions resides in an unconscious propensity to regard ourselves as the center, the cause, and the conclusion of time. Our reflexes and our pride transform into a planet the parcel of flesh and consciousness we are.”
—E.M. Cioran (b. 1911)
“We have no more right to consume happiness without producing it than to consume wealth without producing it.”
—George Bernard Shaw (1856–1950)