How spending on education trends like a luxury good across classes

Under Engel’s law in economics, when a family gets richer, it does not eat proportionally more; it eats a little better, and food takes up a smaller portion of the family’s total spending. Thus, a question arises: when an Indian family gets richer, what happens to the money it spends on its children’s schooling?

Data from the latest Comprehensive Modular Survey on Education (which was conducted by the National Statistical Office between April and June 2025) shows that a household that is 10% richer spends roughly 14% more on its children’s schooling. In technical terms, the expenditure elasticity is 1.42. Anything above 1 means the item behaves like a luxury good. Education, on this measure, sits alongside luxurious items.

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