Learning and Forgetting: The Dynamics of Aircraft Production

C. Lanier Benkard

No 7127, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper introduces a new cost dataset for a commercial aircraft firm and uses this data to analyze the dynamics of learning in commercial aircraft production. This dataset is found to be inconsistent with the simple learning hypothesis, and particularly the prediction that a firm's unit cost must decline with its cumulative production. Instead, strong support is found for the hypothesis of organizational forgetting, a more general learning model where unit costs are similarly dependent on a firm's past production experience, but where that experience depreciates over time. Additionally, it is found that some, but not all, of a firm's production experience transfers from one generation of an aircraft to the next. This evidence adds to our understanding of productivity in industries with learning and thus has implications to many fields of economics.

JEL-codes: I11 L62 (search for similar items in EconPapers)
Date: 1999-05
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Published as Benkard, C. Lanier. "Learning And Forgetting: The Dynamics Of Aircraft Production," American Economic Review, 2000, v90(4,Sep), 1034-1054.

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