The average propensity to save (APS) is the percentage of total income that households choose to save instead of spending it on goods and services.

Formula: APS = Total Savings (S) / Total National Income (Y)

Key features:

• APS values can be zero, positive, or negative.
• If households spend more than they earn, they dissave, which results in a negative APS.
• As income levels rise, the APS usually increases because households can afford to save a larger portion of their earnings.
• APS can be calculated as: APS = 1 − APC (where APC is the Average Propensity to Consume).
• While APS shows the current level of saving, it does not explain how households change their saving habits when their income changes; for that, economists use the Marginal Propensity to Save (MPS).