Ernst Engel was a German statistician and economist who is best known for developing the Engel's Law, also known as Engel's Curve, which states that as income increases, the proportion of income spent on food decreases, while the proportion spent on other goods and services increases.
Born on March 26, 1821, in Dresden, Germany, Ernst Engel had a remarkable career in economics and statistics. He worked as the director of the Saxon Statistical Bureau and was a professor at Dresden Polytechnic Institute. His notable contributions to economics include his studies on income distribution, poverty, and consumption patterns.
Engel's Law, proposed by Ernst Engel in 1857, is a key concept in macroeconomics. It describes the relationship between income and spending patterns. According to Engel's Law, as income rises, the percentage of income spent on food decreases, as people tend to spend a smaller proportion of their income on necessities. Instead, they allocate a larger proportion to non-food items such as housing, healthcare, education, and leisure activities. This phenomenon is often attributed to the idea that as income increases, people have more discretionary income to allocate to other goods and services beyond basic necessities.
Ernst Engel's work on Engel's Law has had a lasting impact on economic theory and has been widely studied and applied in the field of economics. His contributions have helped in understanding the relationship between income and consumption patterns, providing valuable insights into how changes in income levels affect consumption behavior.
