Engel's law

The Engelsche law is one of the German statistician Ernst Engel (* 1821, † 1896), first described legality that the income share that is output from a private household for food, decreases with increasing income. This is equivalent to the statement that the income elasticity of demand for food is less than 1.

The Engelsche law is one of the best documented empirical laws of economics. The proportion of funds spent on food income is also called Engel coefficient.

Engel coefficient

The Engel coefficient is the proportion of food expenditure in total consumption expenditure of a household. A low angel coefficient applicable in the angel 's law as an indicator of high material prosperity.

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

Criticism of the indicator practicing nutritionists, the renewed decline in average food quality and tend to deteriorating food situation in some developed countries with high levels of prosperity to - such as Germany - refer. This is associated with the trend toward fast food and discount stores. Background of this anomaly is the fact that food prices take into account the external costs only insufficiently.

Swell

• Engel, Ernst; The Productions and Consumtionsverhältnisse of the Kingdom of Saxony, Journal of the Statistical Bureau of the Royal Saxon Ministry of the Interior, Nos. 8 and 9 ( 1857).

• Microeconomics