We analyze quarterly data on light vehicle sales and buyer income to show that both prices and the income of buyers fall over the model year. The result is relevant to determining the rate of quality improvement of goods.

Using a new dataset, we document a systematic pattern in the demographic characteristics of car buyers over the model year: as vehicle prices fall over the model year, so do buyer incomes. This pattern is consistent with price-insensitive buyers purchasing early in the year, while others wait...