Average Propensity To Consume (APC) Calculator

Calculate the average propensity to consume for a given income and expenses, providing a clear understanding of how much of your income is spent.

Formula

$4,000 / $5,000 = 0.8 Consider Alex and Jamie: their monthly income is $4,000 while their expenses total $5,000. This result indicates that only 80% of their spending is directly supported by their income, implying that they are spending more than they earn and may be relying on credit or savings to cover the shortfall.

Meaning

The Average Propensity to Consume (APC) is a metric used in consumer behavior analysis that measures the average likelihood of an individual making a purchase based on their past behavior and preferences. It provides insights into how inclined a customer is to buy, which helps businesses tailor their strategies to better engage their target audience. The APC value ranges from 0 to 1, where a value of 1 indicates a very high likelihood of purchase (almost a guaranteed purchase), and a value of 0 suggests no intention to buy.