Who Initiates Recalls and Who Cares? Evidence from the Automobile Industry

Nicholas Rupp and Curtis R. Taylor

Journal of Industrial Economics, 2002, vol. 50, issue 2, 123-149

Abstract: In this paper, we investigate two questions. First, we explore which entity (the NHTSA or the manufacturer) is more likely to initiate a given auto safety recall campaign. Second, we analyze the determinants of owner response rates to safety recalls. Our data spans nineteen years (1980–1998) for the six largest auto manufacturers. We find evidence that the government initiates larger, less hazardous recalls involving older models and financially weak firms. Inexpensive recalls are more likely to be manufacturer initiated. The largest owner repair responses are associated with newsworthy hazardous defects of new domestic vehicles in their inaugural model year.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:50:y:2002:i:2:p:123-149

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Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

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