Drop of the Engel coefficient does not necessarily mean the improvement of people's life quality

Drop of the Engel coefficient does not necessarily mean the improvement of people's life quality
Apr 19, 2007 03:15
LEOPOLD219 Points: Join Date: Feb 7, 2007 Status: offline	These years, the income level of Chinese people has been gradually raised. However, the Engel Coefficient has negatively dropped. As we all know, the Engel Coefficient is percentage expressing how much proportion of the food consumption takes up in a family’s total income. Related reports show that people did not really benefit from the rise of the Engel Coefficient because the increasing part of the income has to some extent been exploited. This phenomenon can be explained from 3 respects: First, the gap between the rich and poor are becoming deeper and has surpassed internationally accepted alarm level. Because of the price of non-food goods is much higher, the high consumption of some luxury goods will easily drag the Engel Coefficient, which may conceal the lack of food consumption of people with lower income. Second, national consumption of China has become cooler these years. Insufficient demand and consumption has restricted the national economy. In this circumstance, despite the drop of the Engel Coefficient, the total amount of consumption has not increased, showing that in general people’s life quality has not been greatly improved. Third, the decline of food consumption has been largely influenced by the increase consumption of housing, education and medical treatment. For example, in some cities of China, the educational consumption for offspring takes up 1/3 of the family income. In this mean, drop of the Engel Coefficient does not mean the consumption for enjoyment increases, but means that people’s economical burden has become heavier, which makes them feel more stressed than before.

Apr 19, 2007 03:15

LEOPOLD219
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Join Date: Feb 7, 2007
Status: offline

These years, the income level of Chinese people has been gradually raised. However, the Engel Coefficient has negatively dropped.
As we all know, the Engel Coefficient is percentage expressing how much proportion of the food consumption takes up in a family’s total income. Related reports show that people did not really benefit from the rise of the Engel Coefficient because the increasing part of the income has to some extent been exploited.
This phenomenon can be explained from 3 respects:
First, the gap between the rich and poor are becoming deeper and has surpassed internationally accepted alarm level. Because of the price of non-food goods is much higher, the high consumption of some luxury goods will easily drag the Engel Coefficient, which may conceal the lack of food consumption of people with lower income.
Second, national consumption of China has become cooler these years. Insufficient demand and consumption has restricted the national economy. In this circumstance, despite the drop of the Engel Coefficient, the total amount of consumption has not increased, showing that in general people’s life quality has not been greatly improved.
Third, the decline of food consumption has been largely influenced by the increase consumption of housing, education and medical treatment. For example, in some cities of China, the educational consumption for offspring takes up 1/3 of the family income. In this mean, drop of the Engel Coefficient does not mean the consumption for enjoyment increases, but means that people’s economical burden has become heavier, which makes them feel more stressed than before.

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