Dynamics of Expenditures on Durable Goods: the Role of New-Product Quality

Fabio Bertolotti, Alessandro Gavazza and Andrea Lanteri

No 16283, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the role of new-product quality for the dynamics of durable-goods expenditures around the Great Recession. We assemble a rich dataset on US new-car markets during 2004-2012, combining data on transaction prices with detailed information about vehicles' technical characteristics. During the recession, a reallocation of expenditures away from high-quality new models accounts for a significant decline in the dispersion of expenditures. In turn, car manufacturers introduced new models of lower quality. The drop in new-model quality persistently depressed the technology embodied in vehicles, and likely contributed to the slow recovery of expenditures.

JEL-codes: E21 E23 E32 (search for similar items in EconPapers)
Date: 2022-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16283 (application/pdf)

Related works:
Journal Article: Dynamics of Expenditures on Durable Goods: The Role of New-Product Quality (2023)
Working Paper: Dynamics of expenditures on durable goods: the role of new-product quality (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16283

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16283

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().