Patterns of Household Expenditure

Extract

The way in which people spend their money is a matter of considerable interest. It is a topic which can be studied from many points of view and with varying degrees of sophistication, but it is well worth considering with the aid of a few graphs or Engel curves. Ernst Engels published his first account of Belgian working class family budgets in 1857 and his name is still associated with this study, though many of his conclusions concerning expenditure patterns have been falsified by subsequent changes in economic and social conditions.

These curves are used to illustrate the way in which expenditure on particular goods and services changes as household income increases. Data for their construction is obtained from household budget inquiries and is usually given in the form of average expenditure per household on a wide range of commodities for a limited number of income groups.