Engel's law

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Engel's law

a principle that states that consumers will tend to spend an increasing proportion of any additional income upon LUXURY GOODS and a smaller proportion on STAPLE GOODS, so that a rise in income will lower the overall share of consumer expenditures spent on staple goods (such as basic foodstuffs) and increase the share of consumer expenditures on luxury goods (such as motor cars). See INFERIOR PRODUCTS, INCOME ELASTICITY OF DEMAND, INCOME CONSUMPTION CURVE, AGRICULTURAL POLICY.
References in periodicals archive ?
We illustrate in the paper the technique of Engel curve computation on the household's income and expenditure data originated from the Statistical Office of the Slovak Republic.
We present results from an Engel curve estimation specifically using the Working (1943) approach and a two-part fractional response model with instrumental variables to account for selection bias and endogeneity of remittances.
The study will make use of the Engel curve framework, which shows the relationship between a household's expenditure on a particular good and total household income, holding prices constant.
h]) is such that child benefit has the same effects on expenditures as total expenditure CB does--we refer below to this latter effect as the Engel curve slope.
The article begins with two key economic concepts used in the analysis, Engel's law and the Engel curve, followed by the literature review on the applications of these concepts to services in general, and to telecommunications services in particular.
The Engel Curve for Health Services in Colombia: A Semiparametric Approach
This article provides a further look at the functional form of the synthetic model, showing that, at the individual consumer level, an arbitrary differential demand system has the same demand response to change in total expenditure as that of a specific form of Engel curve.
For example, in Engel curve analysis y would represent the expenditure or expenditure share on some good or group of goods and x would represent total disposable income or the total budget.
This single parameter formulation imposes equal income elasticities for services and food, but the results are reinforced if the Engel curve is steeper for services since the growth rate of total consumption fell after the mid 1970s.
MATHEMATICAL EXPRESSION OMITTED] which is a specification of the Engel curve depending on the specific form of [L.
Note: All figures calculated using respective Engel curve equations for each food at corresponding year.