Econometrica Vol. 28 No. 4 1960
On a Method of Computing Engel Elasticities from Concentration Curves
Abstract
THIS PAPER PRESENTS, on the assumption of lognormality, a simple graphical method of deriving the Engel elasticities for various items of consumer expenditure from what are known as concentration curves. Usually two types of such curves are distinguished: (a) the Lorenz curve which relates the proportion of total expenditure to the proportion of persons spending up to a given level of total expenditure per capita, and (b) the specific concentration curve which relates the proportion of total consumption of a specific commodity to the proportion of persons spending up to a given level of total expenditure per capita. We shall briefly indicate a method of using these curves to calculate the Engel elasticities and shall present some numerical results for a few important items of consumers' expenditure. These estimates are compared with other estimates obtained by the conventional method of least squares, which requires additional computations.
- DOI
- 10.2307/1907570
- Volume
- 28
- Issue
- 4
- Pages
- 882
- Sources
- openalex crossref