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:
“Three million of such stones would be needed before the work was done. Three million stones of an average weight of 5,000 pounds, every stone cut precisely to fit into its destined place in the great pyramid. From the quarries they pulled the stones across the desert to the banks of the Nile. Never in the history of the world had so great a task been performed. Their faith gave them strength, and their joy gave them song.”
—William Faulkner (1897–1962)
“Women ... are degraded by the ... propensity to enjoy the present moment, and, at last, despise the freedom which they have not sufficient virtue to struggle to attain.”
—Mary Wollstonecraft (1759–1797)
“We have no more right to consume happiness without producing it than to consume wealth without producing it.”
—George Bernard Shaw (1856–1950)