It is always amazing to see a theory in practice.
Kanina nang nasa Mcdo ako, na-realize ko na ang concept ng Engel Curve sa Economics is right before my eyes. The concept of the Engel Curve explains that for a normal good, as the income of the consumer rises, the consumption of that good also increases. The higher income enables the consumer to have more purchasing power, allowing him to buy more of the good. However, not all goods in the market are normal goods. There are inferior goods, which are consumed less if the income of the consumer increases.
So ano ang kinalaman nito sa Mcdo? Naalala ko lang kanina na ang boss ko na sobrang yaman ay never kumain sa Mcdo. Nung nag-uumpisa pa lang ako sa work ko, naisip ko kung kumakain kaya sa Mcdo ang boss ko. Sabi ng partner ko, malamang hindi dahil mukhang ayaw ni sir ng fast food. Pero di ko pa na-realize noon na application na pala yun ng Engel Curve.
Kanina na-realize ko na Engel Curve in practice na nga yung fact na hindi kumakain ang boss ko sa Mcdo. Last week kasi, nag-dinner meeting kami sa Makati Shang-rila. Malakas naman kumain si sir pag nasa ganong lugar kami. Pero pag sa iba, sobrang hina niya kumain. Habang nag-oorder kanina, naalala ko ang laki ng income gap naming ng boss ko, at naisip ko na ‘as income increases, the consumption of Mcdo products does not increase; in fact, it decreases because the consumer prefers another type of good’, just like my boss. In other words, there is a change in taste, and the consumer prefers to shift his consumption to another type of good than consume more of what he can afford when he had less income.
May application ang Engel Curve sa labor. Initially, as the wage is increased for the worker, he tends to work more so he could get promoted and get a higher wage. However, at much higher levels of wages, the worker prefers to work less and have more leisure instead.
I miss econ.
