With rising incomes, the share of expenditures for food (and, by extension, other) products declines (= Engel found, based on surveys of families' budgets and expenditure patterns, that the income elasticity of demand for food was relatively low). The resulting shift in expenditures affects demand patterns and employment structures. [Engel's Law does NOT suggest that the consumption of food products remains unchanged as income increases! It suggests that consumers increase their expenditures for food products (in % terms) less than their increases in income]
"... je aermer eine Familie ist, einen desto groesseren Antheil von der Gesamtausgabe muss zur Beschaffung der Nahrung aufgewendet werden ..." (Ernst Engel 1857, 2. edition, 1896b, s.28-29). [see also: Income elasticity of demand] [Not to be confused with Friederich Engels, the collaborator of Karl Marx]
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