Average Propensity To Save

AAA

DEFINITION of 'Average Propensity To Save'

The average propensity to save (APS) is an economic term that refers to the proportion of income that is saved rather than spent on goods and services. Also known as the savings ratio, it is usually expressed as a percentage of total household disposable income (income minus taxes). The inverse of average propensity to save is the average propensity to consumer (APC).

INVESTOPEDIA EXPLAINS 'Average Propensity To Save'

The average propensity to save can be affected by factors such as the proportion of older people in an economic region who have less motivation and ability to save, and the rate of inflation, as people spend now and save later when prices are expected to rise.

RELATED TERMS
  1. Economics

    A social science that studies how individuals, governments, firms ...
  2. Personal Income

    Total compensation received by an individual. Personal income ...
  3. Discretionary Income

    The amount of an individual's income that is left for spending, ...
  4. Disposable Income

    The amount of money that households have available for spending ...
  5. Savings

    According to Keynesian economics, the amount left over when the ...
  6. Current Liquidity

    The total amount of cash and unaffiliated holdings compared to ...
Related Articles
  1. Consumer Confidence: A Killer Statistic
    Retirement

    Consumer Confidence: A Killer Statistic

  2. Consumer Spending As A Market Indicator
    Markets

    Consumer Spending As A Market Indicator

  3. Are You Saving Too Much?
    Retirement

    Are You Saving Too Much?

  4. 5 (Not-So-Extreme) Coupon-Saving Strategies
    Savings

    5 (Not-So-Extreme) Coupon-Saving Strategies

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center