ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Price Dependent Engel Curve

Price Dependent Engel Curve G V S N Murty IN a recent note1 Ashok Rudra presented some results relating to what he calls "Price Dependent Engel Curve" (PDEQ. The novel feature of the PDEC, according to him, is that it contains two independent variables, namely per capita total consumer expenditure (PTE) and price of the commodity demanded. It goes without saying that when one is dealing with cross-section data the price variable is not necessary in the Engel Curve formulation, unless and otherwise differential prices across PTE classes. By assuming same price in all the PTE classes in a given year, Rudra tried to estimate an Engel Curve by introducing price and PTE variables; and to me it is rather surprising to name it as 'price dependent*, for it is only a 'partial demand function'.

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