Engel curve

Arthur Lewbel
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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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.
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How to cite this article

Lewbel, Arthur. "Engel curve." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 17 November 2017 <http://www.dictionaryofeconomics.com/article?id=pde2008_E000085> doi:10.1057/9780230226203.0476

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