The 19th-century German economist Ernst Engel identified a basic pattern in the relationship between food expenditure and income. He argued that as income rises, people increase their spending on food by a smaller amount, so the proportion of income allocated to food falls.
In other way to define, Engel’s law is an observation in economics stating that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises.
Someone tripling their consumption of food unless they had started off in poverty.
The law implies that the poor spend a higher proportion of their income on food – very poor families living in developing countries often spend most of their income on basic staples. Contrast this with a consumer in a rich nation, whose income is spent on a complex basket of goods – housing, travel, holidays, entertainment – within which food may be just a modest share. Engle’s law highlights the vulnerability of the poor to increases the cost of food – if most of their income goes on food, they may not be able to adequately feed themselves when prices rises.