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- Title
The Cost off Automobile Safety and the Emissions Regulation to the Consumer: Some Preliminary Results .
- Authors
Crandall, Robert W.; Keeler, Theodore E.; Lave, Lester B.
- Abstract
The article examines the effect of regulatory policies in the U.S. automobile industry upon the consumer cost of owning and operating an automobile. The cost of government regulation of the automobile has been the subject of heated controversy since its inception in the mid-1960's. Much of this controversy has centered on the costs and benefits of individual regulations, but there has been little attention paid to the overall effect of emissions and safety regulation. Automotive services require capital, gasoline, repair services, and highway services as well as insurance. Many of the inputs are partial substitutes. The substitution casts doubt on the validity of measuring regulatory costs by simply toting up the reported increases in production costs due to individual regulations. To obtain useful estimates of the cost of regulation, one must attempt to measure the change in the full costs of owning and operating a car that are not due to changes in fuel prices, repair prices, and the rental price of capital or to technological change. The most general specification of the cost function is the translog specification. However, colinearity among the translog terms in the cost function has made it impossible to invert the moment matrices.
- Subjects
UNITED States; AUTOMOBILE industry; INDUSTRIAL costs; CONSUMERS; CAPITAL; AUTOMOBILE repair
- Publication
American Economic Review, 1982, Vol 72, Issue 2, p324
- ISSN
0002-8282
- Publication type
Article