Average propensity to save

The savings ratio for an entire economy can be affected by (for example) the proportion of older people (as they have less motivation and capability to save), and the rate of inflation (as expectations of rising prices can encourage people to spend now rather than later) or current interest rates.

APS can express the social preference for investing in the future over consuming in the present.

The complement (1 minus the APS) is the average propensity to consume (APC).

Low average propensity to save might be the indicator of a large percentage of old people or high percentage of irresponsible young people in the population.

With income level changes, APS becomes an inexact tool for measuring these changes.

APS is calculated from the amount of savings as a fraction of income.

Average propensity to save can not be greater than or equal to 1, but APS can be negative, if income is zero and consumption has a positive value.