Determine the initial and new quantities demanded of the product. Determine the initial and new income levels. Calculate the percentage change in quantity demanded and income. Divide the percentage change in quantity demanded by the percentage change in income.
For example, if the quantity demanded of a product increases from 100 units to 120 units when income increases from $50,000 to $55,000, the YED would be calculated as follows: YED = ((120 - 100) / 100) / ((55,000 - 50,000) / 50,000) = 0.20 / 0.10 = 2.0