A 170-year-old economic theory states that as their income increases, people devote a smaller share of it to sustenance. China appears to defy Engel’s law
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A 170-year-old economic theory states that as their income increases, people devote a smaller share of it to sustenance. China appears to defy Engel’s law
Total guessing here as I know nothing about Chinese culture internally - I'm wondering if it's a cultural thing based on history. During the 1940s and the introduction of Mao Zedong's initial communist government China was going through horrendous famines across the country. Some of those folks who were little kids then would have shaped generations afterwards on the value of always having food, which then would have been passed down to a practice today inherent in everyday behavior. Curious if that's the driver. It's the same as in the US where older generations still hid money in mattresses and house wall secret spots because they didn't trust banks after 1929 and the Depression 30s.
Rapid urbanization also means people grow less of their own food.
I’d guess there’s also some switching from cooking at home to eating out.
eating out culture is one of the two reasons the economist gives as well
Yeah, so that could be a combination of doing it more or going to nicer places or even ordering delivery more often.
The problem with relating it to Engel’s Law is that he wasn’t thinking about those qualitative factors.