Famous quote by Ernst Engel

"The poorer is a family, the greater is the proportion of the total outgo which must be used for food... The proportion of the outgo used for food, other things being equal, is the best measure of the material standard of living of a population"

About this Quote

Ernst Engel points to a simple but powerful regularity: as income falls, a larger share of a household’s total spending must be devoted to food. Food is a necessity with limited scope for expansion once basic caloric needs are met, so its income elasticity is less than one. When income rises, people do eat better, but spending on housing, clothing, transport, education, health, and leisure grows faster; the budget share for food shrinks. The proportion spent on food, the Engel coefficient, therefore serves as a concise indicator of material well-being. A high food share signals proximity to subsistence; a low share indicates room for discretionary choices and resilience against shocks.

This insight underpins practical welfare measurement. Statistical offices track food budget shares to assess living standards across regions and over time. Poverty lines have often been calibrated from food needs, multiplied to cover non-food essentials, reflecting that the poor devote most resources to food. Internationally, countries with lower average food shares tend to be richer, and households with high food shares are more vulnerable to food price spikes.

“Other things being equal” is crucial. Food prices, household size and age composition, urban versus rural settings, and home production influence the share independent of income. A farm household consuming own-produced food may report low cash outlays on food without being affluent. Cultural preferences and seasonal variation also matter. Thus, the measure works best comparatively and in aggregate.

Beyond measurement, the pattern signals structural change. As food shares decline, spending shifts to human capital and services, diets diversify toward higher-quality and animal-sourced foods (Bennett’s law), and economies move labor out of agriculture.

Caution is warranted: a low food share could mask hardship if non-food necessities like rent or medical costs crowd out adequate nutrition. Still, across populations and over time, the food budget share remains a remarkably robust window into material living standards.

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Germany Flag This quote is written / told by Ernst Engel between March 26, 1821 and December 8, 1896. He/she was a famous Economist from Germany. The author also have 1 other quotes.
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