The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Engel Curve

  • Arthur Lewbel
  • H. S. Houthakker
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_525

Abstract

An Engel curve describes how a consumer’s purchases of a good like food varies as the consumer’s total resources such as income or total expenditures vary. Engel curves may also depend on demographic variables and other consumer characteristics. A good’s Engel curve determines its income elasticity, and hence whether the good is an inferior, normal, or luxury good. Empirical Engel curves are close to linear for some goods, and highly nonlinear for others. Engel curves are used for equivalence scale calculations and related welfare comparisons, and determine properties of demand systems such as aggregability and rank.

Keywords

Aggregation Consumers’ expenditure Consumer demand Demand equations Engel curves Engel equivalence scales Engel’s law Law of one price Nonparametric methods Rothbarth scales Separability Utility theory Working, H. Working–Leser model 

JEL Classifications

D12 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Arthur Lewbel
    • 1
  • H. S. Houthakker
    • 1
  1. 1.