92 THE GENERAL THEORY OF EMPLOYMENT BK. III

to the operation of decreasing returns) rise less thanin proportion to his income measured in wage-units.As a first approximation, therefore, we can reasonablyassume that, if the wage-unit changes, the expenditureon consumption corresponding to a given level of em-ployment will, like prices, change in the same propor-tion; though in some circumstances we may have tomake an allowance for the possible reactions on aggre-gate consumption of the change in the distribution of agiven real income between entrepreneurs and rentiersresulting from a change in the wage-unit. Apart fromthis, we have already allowed for changes in the wage-unit by defining the propensity to consume in terms ofincome measured in terms of wage-units.

(2) A change in the difference between income andnet income.—We have shown above that the amountof consumption depends on net income rather than onincome, since it is, by definition, his net income thata man has primarily in mind when he is deciding hisscale of consumption. In a given situation there maybe a somewhat stable relationship between the two, inthe sense that there will be a function uniquely relatingdifferent levels of income to the corresponding levelsof net income. If, however, this should not be thecase, such part of any change in income as is not re-flected in net income must be neglected since it willhave no effect on consumption; and, similarly, a changein net income, not reflected in income, must be allowedfor. Save in exceptional circumstances, however, I doubtthe practical importance of this factor. We will returnto a fuller discussion of the effect on consumption ofthe difference between income and net income in thefourth section of this chapter.

(3) Windfall changes in capital-values not allowedfor in calculating net income.—These are of much moreimportance in modifying the propensity to consume,since they will bear no stable or regular relationshipto the amount of income. The consumption of the