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Back to Engel? Some evidence for the hierarchy of needs

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  • Andreas Chai

    ()

  • Alessio Moneta

    ()

Abstract

Using data spanning over four decades (1960-2000), this paper employs Engel's needsbased approach to analyzing household expenditure patterns to find evidence for the existence of a stable hierarchy of expenditure patterns at low levels of household income. Second, we investigate how rising household income influences the manner in which total expenditure is distributed across Engel's expenditure categories. Our results suggest that i) total household expenditure is distributed across Engel's expenditure categories in an increasingly even manner as household income increases and ii) over time, there has been an acceleration in the rate at which household expenditure patterns become diversified as household income rises. Finally, we consider how the shape of Engel Curves may help shed light on the relationship between goods and the underlying needs they serve.

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Paper provided by Philipps University Marburg, Department of Geography in its series Papers on Economics and Evolution with number 2011-13.

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Date of creation: 01 Sep 2011
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Handle: RePEc:esi:evopap:2011-13

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Keywords: Hierarchy of needs; Engel Curves; Engel's Law Length 29 pages;

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Citations

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Cited by:
  1. Kaus, Wolfhard, 2013. "Beyond Engel's law - A cross-country analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 47(C), pages 118-134.
  2. Leonhard K. Lades, 2012. "The impact of differential satiation dynamics on changing consumer behavior, wellbeing, and innovative activity," Papers on Economics and Evolution, Philipps University Marburg, Department of Geography 2012-16, Philipps University Marburg, Department of Geography.
  3. Roger Fouquet, 2013. "Long Run Demand for Energy Services: the Role of Economic and Technological Development," Working Papers, BC3 2013-03, BC3.
  4. Leonhard Lades, 2013. "Explaining shapes of Engel curves: the impact of differential satiation dynamics on consumer behavior," Journal of Evolutionary Economics, Springer, Springer, vol. 23(5), pages 1023-1045, November.

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