Why does the income elasticity demand for food tend to be low in rich countries?

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1090093

2026-04-20 04:36

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In rich countries, the income elasticity of demand for food tends to be low because a larger proportion of income is spent on non-food items such as services, entertainment, and luxury goods as people become wealthier. Additionally, the basic nutritional needs are generally met, leading to diminishing marginal utility from additional food consumption. As a result, increases in income do not significantly boost food expenditure compared to other goods and services.

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