Household consumption expenditure is an important indicator of the level of living of a household. Empirical studies of consumer behaviour have been undertaken for the choice of the most suitable functional form of Engel function'estimated from household budget data on broad groups of items of consumption and to test various theoretical postulates and to quantify the extent of response of the consumer to change in economic factors such as income, prices, stock of wealth, extent of monetization and so on; sociodemographic factors such as households size and its composition, occupation, social class, communities etc.; other factors such as the level of education and age of the head of the households, race, region, physical and climatic conditions, cultural factors etc. Apart from this, empirical studies on consumer behaviour has great significance in the formulation of planning programmes for achieving economic development by eradicating poverty, inequality and bringing about equitable distribution of income and wealth. A popular way of looking at the level of living of the people in a country is to look at the state of poverty by analyzing consumption pattern. For the developing country like India, it is imperative to define and estimate a poverty line and to determine the percentage of people below it on the basis of consumption expenditure for the formulation and implementation of policies in the right direction.