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Engel's law |
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Engel's lawEngel's law is an observation in economics stating that, with a given set of tastes and preferences, as income rises, the proportion of income spent on food falls, even if expenditure on food rises. In other words, the income elasticity of demand of food is less than 1.The observation was made by Ernst Engel, director of the Bureau of Statistics in Prussia, in a paper published by him in 1857.
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