Empirical Verification of Engel's Curve for Orissa

This paper verifies the existence Engle's Curve for the economy of Orissa., Engel's law states that income elasticity of food lies between 0 and 1 which means, even though the amount of expenditure on food may actually expand but it is less than the increase in income. In case of Orissa, our analysis shows that the Engel's law holds true in the case of households of Orissa. This means, our estimation of regression coefficients are consistent with the economic theory. According to the Engel's law, the shares of food expenditure in Orissa were inversely related to the logarithm of total expenditure, which means the income elasticity of food lies between 0 and 1.