Engel's Law

An economic theory introduced in 1857 by Ernst Engel, a German statistician, stating that the percentage of income allocated for food purchases decreases as income rises. As a household's income increases, the percentage of income spent on food decreases while the proportion spent on other goods (such as luxury goods) increases.

For example, a family that spends 25% of their income on food at an income level of $50,000 will spend $12,500 on food. If their income increases to $100,000, it is not likely that they will spend $25,000 (25%) on food, but will spend a lesser percentage while increasing spending in other areas.

Engel's Law similarly states that lower income households spend a greater proportion of their available income on food than middle- or higher-income households. As food costs increase, both for food at home (such as groceries) and food away from home (for example, at a restaurant), the percentage spent by lower income households is expected to increase.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • engel's law — ˈeŋ(g)əlz noun Usage: usually capitalized E Etymology: after Ernst Engel died 1896 German statistician and economist : a generalization in economics: as family income increases, the percentage spent for food decreases, that spent for clothing,… …   Useful english dictionary

  • Engel's law — the assertion that the percentage of a family s income spent on food decreases as its income increases. [named after Ernst Engel (1821 96), German economist] * * * …   Universalium

  • Engel's law — The law stating that the lower a family s income the greater is the proportion spent on food. As the income rises the family s spending is spread across a wider range of goods and services, such as housing, transport, consumer goods, leisure… …   Big dictionary of business and management

  • Engel`s law — remark that the proportion of a family s budget devoted to food declines as the family s income increases …   English contemporary dictionary

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  • Engel, Ernst — ▪ German statistician born March 26, 1821, Dresden, Saxony [Germany] died Dec. 8, 1896, Radebeul, near Dresden       German statistician remembered for the “Engel curve,” or Engel s law, which states that the lower a family s income, the greater… …   Universalium

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  • ENGEL, JOSEPH BEN JUDAH — (1859–1920), Polish rabbi and halakhist. Born in Tarnow, after his marriage he settled in Bendin, where his father in law lived, and there became famous as one of the greatest of Polish rabbis. In 1906 he was elected av bet din of Cracow and was… …   Encyclopedia of Judaism

  • Engel v. Vitale — ▪ law case       case in which the U.S. Supreme Court (Supreme Court of the United States) ruled on June 25, 1962, that voluntary prayer in public schools violated the U.S. Constitution (Constitution of the United States of America) s First… …   Universalium

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