Average Propensity To Consume

An economist's way of describing all the money you waste on Amazon and Steam. Average propensity to consume is the percentage of the earned income being spent on goods and services (basically all the stuff you can spend money on), rather than being socked away for a rainy day.

The figure can be calculated per household, on an individual basis, or it can be calculated on a national basis. It represents the opposite of the average propensity to save. The two together should pretty much account for the total earned income of whatever group you're looking at. (When you get money, you can either spend it or save it.)

Lower income families tend to have a higher average propensity to consume because more of their income is taken to purchase basic necessities. Meanwhile, higher income families might spend more as a total dollar amount, but their spending represents a smaller share of their income, basically because they have more excess cash to tuck away after paying for their basics.