Estimating Aggregate Automotive Income Elasticities from the Population Income-Share Elasticity.

The conventional approach to estimating the income responsiveness of a product's sales involves collecting data on sale s as a function of income and product prices and then estimating a dem and model. In many cases, it is very difficult to either collect the required data or reliably estimate the demand model. This article develops an alternative approach toward estimating these income-responsiveness parameters using only the average income of th e product's buyers and the population income distribution. The authors illustrate their technique with automotive data and obtain fairly intuitive results.