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Journal of Evolutionary Economics

, Volume 22, Issue 4, pp 649–676 | Cite as

Back to Engel? Some evidence for the hierarchy of needs

  • Andreas ChaiEmail author
  • Alessio Moneta
Regular Article

Abstract

Using UK household expenditure data spanning over four decades (1960–2000), this paper employs Engel’s needs-based approach to analyzing household expenditure patterns and finds evidence for the existence of a stable hierarchy of expenditure patterns at low levels of household income. Second, we investigate how rising household income influences the manner in which total expenditure is distributed across Engel’s expenditure categories. Our results suggest that i) total household expenditure is distributed across Engel’s expenditure categories in an increasingly even manner as household income increases and ii) over time, there has been an acceleration in the rate at which household expenditure patterns become diversified as household income rises. Finally, we consider how the shape of Engel Curves may help shed light on the relationship between goods and the underlying needs they serve.

Keywords

Hierarchy of needs Engel curves Engel’s law 

JEL Classification

B23 B25 C14 D12 

Notes

Acknowledgements

We would like to thank Ulrich Witt, Paolo Saviotti, Giorgio Fagiolo, Nicholas Rohde, Liana Wortley, the anonymous referee who provided comments on the paper during the submission process, the participants at the 13th conference of the International Joseph A. Schumpeter Society International Schumpeter Society held in Aalborg (2010), as well members of the Evolutionary Economics Group at the Max Plank Institute of Economics, for very useful comments. We thank the UK Data Archive for providing access to the UK Family Expenditure Survey. The usual disclaimer applies.

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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  1. 1.Griffith Business School, Gold Coast CampusGriffith UniversityGold Coast, QldAustralia
  2. 2.Max Planck Institute of EconomicsEvolutionary Economics GroupJenaGermany
  3. 3.Laboratory of Economics and ManagementScuola Superiore Sant’AnnaPisaItaly

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