The Costs of Fleet Variety

Filip Premik () and Dan Yu ()
Additional contact information
Filip Premik: Department of Economics, Monash University, Melbourne, Australia, https://www.filippremik.com/
Dan Yu: Department of Resource Economics and Environmental Sociology, University of Alberta, Edmonton, Canada, https://apps.ualberta.ca/directory/person/dy6

No 121, GRAPE Working Papers from GRAPE Group for Research in Applied Economics

Abstract: We study how heterogeneity in capital inputs affects firm performance. Drawing on detailed data on municipal bus fleets in Poland, we exploit plausibly exogenous variation generated by public procurement and nationally coordinated sales behavior of bus manufacturers to identify the causal effects of variety in fleet composition across brands and other technical dimensions. More heterogeneous fleets exhibit lower vehicle utilization and, for a fixed level of output, require more units of capital and generate higher costs. Our results emphasize that the productive capacity of capital depends on its internal structure, not only on its aggregate quantity or value.

Keywords: Heterogeneous capital; capital utilization; productivity; fleet composition; organization of production (search for similar items in EconPapers)
JEL-codes: D24 L23 L62 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2026
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