Engel's Law

Popular Terms
Economic theory that the proportion of income spent on food decreases as income increases, other factors remaining constant. This law does not suggest that money spent on food falls with increase in income, but instead that the percentage of income spent on food rises slower than the percentage increase in income. Proposed by the German statistician Ernst Engel (1821-96) in his 1857 paper. Not to be confused with Friedrich Engels, Karl Marx's associate (see communism).

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