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Data Starter: The income elasticity of demand for eating out in the UK

Elizabeth Veal

17th February 2026

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By how much does spending on restaurant meals change when income changes?

Using this data, answer the calculation questions:

UK household income and spending on restaurant meals

The original household income is unknown, but monthly spending on restaurant meals increases from £120 to £150, when average household income per month increases from the original income per month to £2,420

The income elasticity of demand for restaurant meals is 1.25.

Sources: ONS Consumer trends https://www.ons.gov.uk/economy/nationalaccounts/satelliteaccounts/bulletins/consumertrends/julytoseptember2025

  1. Calculate the original household income.
  2. Interpret the YED value.

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Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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