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Engel’s Law Reconsidered

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  • Chakrabarty, Manisha
  • Hildenbrand, Werner

Abstract

Engel's verbal formulation of his Law expresses a "negativ stochastic association" of the bivariate distribution of income and food share across the population. Among the many different definitions of association four are chosen: Kendall's tau, negative quadrant dependence, stochastically decreasing conditional food share distribution functions, and decreasing regression. To link Engel's Law with individual behavior a decreasing regression is not sufficient, the stronger notion of associations are needed. This motivates the empirical analysis of section 4. It is shown that the above notions of associations are well supported by empirical evidence.

Suggested Citation

  • Chakrabarty, Manisha & Hildenbrand, Werner, 2009. "Engel’s Law Reconsidered," Bonn Econ Discussion Papers 22/2009, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:222009
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    References listed on IDEAS

    as
    1. Richard W. Blundell & Martin Browning & Ian A. Crawford, 2003. "Nonparametric Engel Curves and Revealed Preference," Econometrica, Econometric Society, vol. 71(1), pages 205-240, January.
    2. Roger Newson, 2002. "Parameters behind "nonparametric" statistics: Kendall's tau,Somers' D and median differences," Stata Journal, StataCorp LP, vol. 2(1), pages 45-64, February.
    3. Joachim Engel & Alois Kneip, 1996. "Recent approaches to estimating Engel curves," Journal of Economics, Springer, vol. 63(2), pages 187-212, June.
    4. Garry F. Barrett & Stephen G. Donald, 2003. "Consistent Tests for Stochastic Dominance," Econometrica, Econometric Society, vol. 71(1), pages 71-104, January.
    5. Lewbel, Arthur, 1991. "The Rank of Demand Systems: Theory and Nonparametric Estimation," Econometrica, Econometric Society, vol. 59(3), pages 711-730, May.
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    More about this item

    Keywords

    Engel's Law; non- parametric regression; Kendall's tau; stochastic dominance;
    All these keywords.

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B23 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Econometrics; Quantitative and Mathematical Studies

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