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- Title
THE COSTS OF AUTOMOBILE MODEL CHANGES SINCE 1949.
- Authors
Fisher, Franklin M.; Griliches, Zvi; Kaysen, Carl
- Abstract
This paper reports estimates of the costs to the economy of the changes in private automobile specifications that took place during the fifties. In such costs are included not only the costs to the automobile manufacturers themselves of special retooling for new models but also the direct costs of producing larger, heavier, and more powerful cars, as well as the costs of automatic transmissions, power brakes, and the like. Finally, we include the secondary costs not paid out by the automobile companies but paid nevertheless by the consuming public in the form of increased expenditures for gasoline necessitated by the "horsepower race." Throughout, we concentrate on the cost of the resources that would have been saved had cars with the 1949 model lengths, weights, horsepowers, transmissions, etc., been produced in every year. As there was technological change in the industry, we are thus assessing not the resource expenditure that would have been saved had the 1949 models themselves been continued but rather the resource expenditure that would have been saved had cars with 1949 specifications been continued but been built with the developing technology as estimated from actual car construction cost and performance data. In thus assessing the costs of automobile model change, we do not mean to deny that such changes also brought benefits. Indeed, it is quite clear that most or all of the changes involved were in fact desired by the consuming public (perhaps after advertising) and that the automobile companies were satisfying such desires. Nevertheless, the costs estimated seem so staggeringly high that it seems worth while presenting the bill and asking whether it was "worth" it, in retrospect. The largest component of the cost of model changes since 1949 turns out to be the higher costs of automobile construction (as measured by automobile prices) attendant on higher horsepowers, greater lengths, greater weights, and so forth.
- Subjects
AUTOMOBILE operating costs; MODEL cars (Toys); UNITED States economy; AUTOMOBILE industry; BRAKE systems; GAS prices; HORSEPOWER
- Publication
American Economic Review, 1962, Vol 52, Issue 2, p259
- ISSN
0002-8282
- Publication type
Article