What is Engel s coefficient?

Engel's Department. Engel's coefficient (ENGEL's coefficient) is the share of total food expenditure to total personal consumption expenditure. In the 19th century, the German statistician Engel drew a law on the changes in consumption structure based on statistical data

The lower a household's income, the greater the proportion of household income (or total expenditure) spent on food, and as household income increases, the proportion of household income (or total expenditure) spent on food decreases. By extension, the poorer a country is, the greater the proportion of per citizen's average income (or average expenditure) spent on food, and this proportion tends to decline as the country becomes richer.

Engel's coefficient is a proportional number derived from Engel's law. In the mid-nineteenth century, the German statistician and economist Engel investigated the consumption of Belgian households with different incomes, studied the impact of income increase on the composition of consumption demand and expenditure, and proposed the principle of regularity, which was named Engel's law. The main point is that the lower the income of a household or individual, the greater the proportion of expenditure on subsistence food in the household or individual income.

For a country, the poorer it is, the greater the proportion of the average expenditure per citizen that is spent on food. The Engel coefficient is determined by the proportion of food expenditure to the total expenditure. An Engel coefficient of more than 59% is considered poor, 50-59% is subsistence and clothing, 40-50% is moderately well-off, 30-40% is rich, and less than 30% is the richest.

Engel's coefficient is the share of total food expenditure to total personal consumption expenditure.

The German statistician Engel summed up the following law on the changes in consumption structure: the smaller the Engel coefficient of a family or country, the richer the family or country's economy; Conversely, the higher the Engel coefficient, the poorer the family or country's economy.

Engel's coefficient is the proportion of total food expenditure to total personal consumption expenditure, which is a popular concern in recent years, generally reflecting the level of living standards, and the Engel coefficient is generally higher in developed countries.

1.It is recommended that you pay more attention to your own life and improve the Engel coefficient.

2.Live seriously, be kind to yourself, eat and drink well.

3.Work hard and enjoy a good life.

Extended Materials. 1.Engel's coefficient is the number of proportions obtained according to Engel's law.

In the middle of the 19th century, the German statistician and economist Engel investigated the consumption of Belgian households with different incomes, studied the impact of income growth on the composition of consumption demand and expenditure, and proposed a regular principle, that is, Engel's law. .The main point is that the smaller the household or individual income, the greater the proportion of the household or individual income spent on subsistence food.

For a country, the poorer a country is, the greater the proportion of the average expenditure per citizen on food. The Engel coefficient is ultimately determined by the share of food expenditure in total expenditure. An Engel coefficient of more than 59 percent is considered poor, 50 to 59 percent is food and clothing, 40 to 50 percent is moderately well-off, 30 to 40 percent is rich, and less than 30 percent is the richest.

2.The formula for Engel's law:

Percentage change in food expenditure Percentage change in total expenditure x 100% = proportion of food expenditure to total expenditure (r1).

or % change in food expenditure % change in income x 100% = ratio of food expenditure to income (r2).

Note: R2 is also known as the income elasticity of food spending. Engel's law is based on empirical data.

It only applies to the premise that all other variables are constants. Therefore, when examining the change of the proportion of food expenditure in income, the influence of factors such as urbanization degree, food processing, catering industry, and food structure changes on the growth of household food expenditure should also be considered. Only when the average level of food consumption is high will a further increase in income not have a significant impact on food expenditure.

Engel's coefficient is a proportional number obtained according to Engel's law, which is an indicator that reflects the level of living standards. The formula is as follows: Engel's coefficient:

Food Expenditure Total Expenditure x 100% = Engel Coefficient In addition to food expenditure, the proportion of clothing, housing, daily necessities and other expenditures in the growth of household income or total expenditure has also shown a downward trend after a period of growth. Engel's coefficient is an important indicator commonly used in the world to measure the living standard of residents.

Engel's coefficient is the source of the English name's coefficient, specifically, the proportion of food expenditure of a country's residents to total personal consumption expenditure. Engel's coefficient is based on Engel's law, which concludes that the richer a country is, the smaller the proportion of food expenditure by its inhabitants to their total personal consumption expenditure. Conversely, the poorer a country's inhabitants are, the greater the proportion of food expenditure in that country to its total personal consumption expenditure.

Introduction to Engel's coefficient.

The formula for calculating Engel's coefficient is: amount of food expenditure Total amount of expenditure x 100% = Engel coefficient. Generally speaking, Engel's coefficient can be used as an important indicator to measure the actual living standard of a country or family, of which Engel's coefficient is above 59%, and the country as a whole is poor; Engel's coefficient is 50%-59%, and the overall economic level of the country is the level of food and clothing; Engel's coefficient is 40%-50%, and the country as a whole is in a well-off state; Engel's coefficient is between 30% and 40%.

The inhabitants of this country are generally wealthy; If the Engel coefficient falls below 30 per cent, the inhabitants concerned will be extremely wealthy.

Engel's coefficient refers to the proportion of food expenditure in the consumption expenditure of urban and rural residents, which can be used to reflect people's living standards to a certain extent.

The lower the income, the greater the Engel coefficient; The higher the income, the smaller the Engel coefficient. Internationally, it is generally believed that when the Engel coefficient is greater, the residents live in a state of poverty.

In between, the living standards of residents are in a state of subsistence and clothing; between them, the living standards of residents have reached a well-off level; In between, the standard of living of the inhabitants is in a state of affluence; When it is small, the inhabitants live to reach wealth.

Gini coefficient

The proportion of the total household income that is used for unequal distribution. It is an indicator that reflects the equal distribution of income between urban and rural residents, and it is the first of the Lorenz curve. Internationally, the Gini coefficient is generally used as an indicator to measure the degree of income distribution disparity, with the Gini coefficient being a maximum of "1" and a minimum of "0".

The former means that the income distribution among residents is absolutely unequal, that is, 100% of the income is occupied by all the people in one unit; The latter means that the distribution of income among the inhabitants is absolutely equal, without any differences. It is generally believed that if the Gini coefficient is less than the absolute average of income, it means that it is relatively average, it means that the distribution is relatively reasonable, it means that the gap is large, and the above means that the gap is huge.