Wednesday, June 4, 2008
Definition of the Week:
Engel’s Law
Engel’s Law:
People
generally spend a smaller share of their budget on food as their income
rises. As people get richer they can afford better-quality food, so
their food spending may increase overall, but they can also afford
other luxuries, which tend to take a larger percentage of their budget.
Hence the share of food in total spending falls as incomes grow.
(source: Economist.com)



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