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Engel’s Law and Expenditure Elasticities of Specific Food Items in India: 1950-51 to 1999-2000

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  • A R Prasad

    (Department of Economics, Faculty of Social Sciences, Banaras Hindu University, Varanasi – 221 005, India)

Abstract

Economic development involves an increase in national and per capita income and the consequent changes in the consumption pattern. A notable change in the pattern of consumption expenditure is expected due to change in per capita income. The pattern of expenditure is a good indicator of the economic status and the standard of living of the consumer and also shows the relative importance of individual items in the consumption pattern. As the economy develops, the level of income of its people increases and they begin consuming larger quantity and superior quality products. This process though quite gradual brings about changes in the pattern of consumption over time. The pattern of private final consumption expenditure on food commodity group and specific food items gives a broad idea of the change in household consumption pattern and is a direct measure of the living standard of the people. It is, therefore, desirable to analyse the pattern of consumption expenditure and the present exercise, therefore, deals with the analysis of the responsiveness of consumption expenditure on specific food items to the change in total consumption expenditure on food commodity group during 1950-51 to 1999-2000. Sign and magnitude of estimates of expenditure elasticities will prove to be useful in classifying the items of food into luxuries and necessities at a macro level.

Suggested Citation

  • A R Prasad, 2005. "Engel’s Law and Expenditure Elasticities of Specific Food Items in India: 1950-51 to 1999-2000," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 1(4), pages 233-242, December.
  • Handle: RePEc:jge:journl:146
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    References listed on IDEAS

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    1. Rena, Ravinder, 2007. "Sectoral Performance In The African Economy – Some Issues And Trends," MPRA Paper 11089, University Library of Munich, Germany, revised 2007.
    2. Niimi, Yoko & Ozden, Caglar, 2006. "Migration and remittances : causes and linkages," Policy Research Working Paper Series 4087, The World Bank.
    3. World Bank, 2007. "World Development Indicators 2007," World Bank Publications, The World Bank, number 8150.
    4. RavinderRena, 2008. "Sectoral Performance in the African Economy – Some Issues and Trends," Indus Journal of Management & Social Science (IJMSS), Department of Business Administration, vol. 2(1), pages 1-14, June.
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    More about this item

    Keywords

    Economic Development; Engel’s law; per capita income; consumption; Indian economy; food articles;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • K0 - Law and Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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