Engel's law

Schematic representation of the relationships described by Engel

The engelsche law is one of the German statistician Ernst Engel (* 1821 , † 1896 ), first described regularity that the income share , to a private home for the nutrition issues, decreases with increasing income. This is equivalent to saying that the income elasticity of the demand for food is less than 1.

Engel's Law is one of the best-documented empirical laws in economics . The percentage of income spent on food is also called the Engel coefficient.

Angel coefficient

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The Engel coefficient is the share of expenditure on food in relation to the total consumption expenditure of a household. According to Engel’s law, a low Engel coefficient is an indicator of high material wealth .

Compared to the commonly used indicator of prosperity, gross domestic product , it has the advantage that the local price level is automatically taken into account.

swell

• Engel, Ernst; The relations of production and consumption of the Kingdom of Saxony, magazine of the statistical office of the Royal Saxon Ministry of the Interior, No. 8 and 9 (1857).