Engel's law
Encyclopedia
Engel's law is an observation in economics
stating that as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In other words, the income elasticity of demand of food is between 0 and 1.
The law was named after the statistician
Ernst Engel
(1821–1896).
Engel's Law doesn't imply that food spending remains unchanged as income increases: It suggests that consumers increase their expenditures for food products (in % terms) less than their increases in income.
One application of this statistic is treating it as a reflection of the living standard of a country. As this proportion or "Engel coefficient" increases, the country is by nature poorer, conversely a low Engel coefficient indicates a higher standard of living.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
stating that as income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In other words, the income elasticity of demand of food is between 0 and 1.
The law was named after the statistician
Statistician
A statistician is someone who works with theoretical or applied statistics. The profession exists in both the private and public sectors. The core of that work is to measure, interpret, and describe the world and human activity patterns within it...
Ernst Engel
Ernst Engel
Ernst Engel was a German statistician and economist, famous for the Engel curve and the Engel's law.Ernst was born in Dresden in 1821...
(1821–1896).
Engel's Law doesn't imply that food spending remains unchanged as income increases: It suggests that consumers increase their expenditures for food products (in % terms) less than their increases in income.
One application of this statistic is treating it as a reflection of the living standard of a country. As this proportion or "Engel coefficient" increases, the country is by nature poorer, conversely a low Engel coefficient indicates a higher standard of living.