A Study on the Average Propensity to Consume of Urban Households in China

Based on the grouped data of Chinese urban households,income gap is the reason of the decline of average propensity to consume(APC),but it cannot explain the main changes of consumption propensity because the statistical data of the high income households may be inaccurate.In reality,income gap is the key factor which leads to the decline of consumption propensity.There are other different factors which may lead to the decline.Comparatively speaking,the consumption behavior of Chinese urban households better suits Keynes' absolute income hypothesis,and precautionary savings cannot fully explain the change of consumption propensity.