Engle coefficient is an indicator used to show the proportion of income spent on
food. It is used to illustrate the difficulty of people acquiring basic needs of
life. Thus, this indicator can be used to represent people’s living standard.
Both Engle coefficients of urban and rural households are on a falling trend. In
1978, Engle coefficient of urban households is 58% and it has fallen to 36% in
2007. With regards to the rural households, the Engle coefficient has decreased
from 68% in 1978 to 43% in 2007. In addition to the fact that disposable income
per capita is rising, this results in people to spending more money on other
aspects such as clothing, housing, education and private cars.
Below is the chart of Engle coefficient for Chinese urban households and rural households from year 1978 - 2009:
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