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Engel’s law

📈 Economics By CampusDown Wiki Editorial Team Last updated
Engel’s law states that as household income rises, the share of total spending devoted to food falls.
Contents
  1. 1. Overview
  2. 2. Frequently asked questions
  3. 3. References

Overview

Ernst Engel found in 1857 Saxon household data that poorer families spend a larger share on food. The Engel coefficient = food spending ÷ total consumption. Food has income elasticity below 1; Houthakker (1957) confirmed the pattern internationally. Schwabe’s law is the housing analogue. Dining out, prices and household composition limit its use as a welfare indicator.

Frequently asked questions

Does a rising coefficient mean hardship?
Possibly; check food inflation and eating-out trends.

References

  1. Engel, E. (1857). Die Productions- und Consumtionsverhältnisse des Königreichs Sachsen. Zeitschrift des Statistischen Bureaus des Königlich Sächsischen Ministeriums des Innern, 8–9.
  2. Houthakker, H. S. (1957). An international comparison of household expenditure patterns, commemorating the centenary of Engel’s law. Econometrica, 25(4), 532–551.
  3. 통계청. 가계동향조사.

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This article was last updated on October 24, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.