Definition of Engel Curve


On a graph with good 1 on the horizontal axis and good 2 on the vertical axis, envision a convex indifference curve, and a diagonal budget constraint that meets it at one point. Now move the budget constraint in and out and mark the points where the tangencies with indifference curves are. The locus of such points is the Engel curve -- it's the mapping from wealth into the space of the two goods.

That is, the Engel curve is (x(w), y(w)) where w is wealth and x() and y() are the amounts of each of the goods purchased at those levels of wealth. (Econterms)

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Econterms. "Definition of Engel Curve." ThoughtCo, Jun. 25, 2014, Econterms. (2014, June 25). Definition of Engel Curve. Retrieved from Econterms. "Definition of Engel Curve." ThoughtCo. (accessed April 27, 2018).