The absorption length for photon propagation in highly concentrated colloidal dispersions calculated from temporal intensity profiles of 100 femto-second pulses is much longer than the absorption length obtained from the measurements of static light transmission in the pure continuous phase fluid. The difference between these two values is explained on the basis of small interparticle spacing at high particle concentration and hence shorter paths traveled by photons through the absorbing medium relative to the total diffusive path in the dispersion. The two values are in good agreement when the absorption length is rescaled with the interparticle separation.