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Food Takes Less. Essentials Take More.

The Engel coefficient measures living standards by the share of spending that goes to food. In the U.S. Consumer Expenditure Survey, the food share fell in every income group between 1984 and 2023. Add housing and utilities, transportation, and health care, and the share of spending on that broader group rose in every income group, most of all in the lower ones.

Income group (by income before taxes):Lowest fifthMiddle fifthHighest fifth

Food

share of total spending, %

10121416181984199420042014202315.613.711.3

Food, housing and utilities, transportation, health care

share of total spending, %

506070801984199420042014202375.368.757.0

1984 and 2023 by income group

Income groupFood 1984Food 2023Broader 1984Broader 2023
Lowest fifth16.115.669.075.3
Second17.414.569.171.4
Middle fifth16.213.765.468.7
Fourth15.113.161.063.9
Highest fifth13.211.356.657.0
All households15.012.962.764.0

Broader = food + shelter + utilities + transportation + health care, as a share of total expenditure (%).

What the figures show

  • The food share fell in every group. The broader share rose in every group: by 6.3 points in the lowest fifth, 3.3 in the middle fifth, and 0.4 in the highest fifth.
  • Across all households the broader share barely moved (62.7% to 64.0%), because the highest fifth, which spends the most, held the average down.
  • The rise comes mainly from health care and housing; transportation took a smaller share in every group.

Limits

  • The broader measure is a proxy. It leaves out childcare and communications and counts all vehicle costs. It is not the generalized Engel coefficient (GEC) itself.
  • It cannot separate higher prices from larger homes or better medical care.
  • The income groups are drawn afresh each year and do not follow the same households; the lowest fifth includes many retired people.
  • Shares are of total spending, not income, because reported income is unreliable at the bottom of the distribution.

Data and method

Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Surveys, annual mean expenditures by quintile of income before taxes, 1984–2023, retrieved through the public BLS API. The files below contain the values as retrieved, the computed shares, and the script that reproduces them.

This page accompanies Chapter 5 of An Inquiry into the Nature and Causes of the Wealth of the People. The book