Working Paper: NBER ID: w5746
Authors: Steven Berry; Samuel Kortum; Ariel Pakes
Abstract: This paper focuses on how changes in the economic and regulatory environment have affected production costs and product characteristics in the automobile industry. We estimate cost functions characteristics. Then we examine how this cost surface has changed over time and how these changes relate to changes in gas prices and in emission standard regulations. We also briefly consider the related questions of how changes in automobile characteristics, and in the rate of patenting, are related to regulations and gas prices.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| changes in gas prices (Q31) | production costs (D24) |
| changes in emission standards (Q52) | production costs (D24) |
| emission standards tightened in the 1970s and 1980s (Q52) | production costs (D24) |
| one-mile-per-gallon increase in fuel efficiency (N72) | production costs increase by approximately $80 to $160 (L11) |
| having air conditioning as standard equipment (L62) | production costs increase by about $2,600 (D24) |
| stricter regulations in 1980 (L51) | jump in production costs (D24) |