This paper attempts to provide empirical evidence of the positive definiteness of the mean income effect matrix, a sufficient condition for market demand to satisfy the law of demand derived by Härdle, Hildenbrand and Jerison [HHJ(1991)]. Increasing heterogeneity in spending of households leads to this sufficient condition. Based on this framework we use the NSS 50-th round data (1993-1994) for the rural sector of India to examine the empirical viability of this condition. Due to restrictive assumption on the density function and several other limitations of the indirect method we use the nonparametric direct average derivative estimation procedure [Stoker (1993)], unlike the indirect method used in the HHJ paper. It is shown that the required heterogeneity condition is well supported in this data and the income effect matrix is, indeed, positive definite.