The existence of a hierarchy of wants has important theoretical
implications for the evolution of consumption and the shape of Engel
Curves. Using data from the UK Family Expenditure Survey (1960-2000), this
paper examines the degree to which the distribution of consumption
expenditure across wants is stable at the lowest income levels.
Furthermore, we analyze how kinks in the shape of Engels Curves are
related to the number of wants a goods is connected to (Drakopoulos 1994).
Evidence for a stable order of wants is observed in the lowest income
decile, supporting Engel’s claim that the wants related to the consumption
of food, clothing, housing, heating and lighting are of the first order,
while wants related to the consumption of other goods, such as health,
education, and services are of the second order. Analysis of the
derivatives of Engel curves reveals a broad tendency for multipurpose
goods to exhibit relatively kinked Engel curves whilst single purpose
goods exhibit relatively smooth Engel curves.