Average propensity to save
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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).
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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.
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Average propensity to save
The average propensity to save (APS), also known as the savings ratio, is an economics term that refers to the proportion of income which is saved, usually expressed for household savings as a percentage of total household disposable income. The ratio differs considerably over time and between countries. The savings ratio can be affected by (for example): the proportion of older people, as they have less motivation and capability to save; the rate of inflation, as expectations of rising prices can encourage people to spend now rather than later (monetary base/mass depreciation).
The inverse is the average propensity to consume (APC).
See also
- Marginal propensity to save
- Marginal propensity to consume
- Golden Rule savings rate
- Kinetic exchange models of markets
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