The “proxy,” an easier way to count.

The number of new car registrations can be used as a proxy for new car sales in cases where the new car sales numbers are not available, or the new car registration statistics are easier or cheaper to get.

In an article about the European car sales, the Wall Street Journal reports, “Last year, new passenger car registrations, a proxy for new car sales, rose 5.7% to 12.6 million, according to figures released by the European Automobile Manufacturers’ Association, or ACEA.”

Why is the number of new car registrations a good proxy for new car sales numbers? It is based on the assumption that people who buy new cars will register them and use them right away, so it is reasonable to assume a one to one relationship, with a very high degree of accuracy.

Another example of a proxy would be using the sales of various commodities as a measure of the strength of an economy, i.e., the sale of certain luxury goods. Some proxies are better at mimicking the underlying statistic than others.

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