Engel's Law

Engel's Law states that as a household’s income increases, the proportion of income spent on basic needs like food decreases, even if the total amount spent on food may rise. In other words, wealthier families tend to allocate a smaller percentage of their earnings toward food, often spending more on other items such as education, healthcare, and leisure. This reflects that once essential needs are met comfortably, additional income is directed toward non-essential or luxury goods and services, highlighting changes in spending patterns with income levels.