The relationship between poverty, income and the cost of food according to Engel's law

The relationship between poverty, income and the cost of food according to Engel's law

One way to observe the impact of the food industry on everyday life is to look at food expenses in relation to a household's average disposable income. This relationship between the two factors follows a universal rule formulated in very clear terms in 1857 by Ernst Engel, a German economist and statistician:

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The poorer a family is, the higher the share of expenses aimed at securing nourishment

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A rule that applies at all income levels - the ratio decreases as wealth increases - and across different nations (poorer countries spend more on food than wealthier ones). The average in the United States fell from 43 percent in 1900 to just 8.6 percent in 2020 (although in 2022 it had risen to 11 percent); the Chinese share remains decidedly high (almost exactly 30 percent in 2020). India's share is very close to the Chinese average, and within the European Union the parameter for individual countries follows a predictable order, from Romania's 26 percent to Germany's 10.8 percent.

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