Bertolotti, Fabio, Gavazza, Alessandro ORCID: 0000-0001-9236-5813 and Lanteri, Andrea
(2023)
Dynamics of expenditures on durable goods: the role of new-product quality.
Economic Journal, 133 (652).
1641 - 1656.
ISSN 0013-0133
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Abstract
We study the role of new-product quality for the dynamics of durable-good expenditures around the Great Recession. We assemble a rich dataset on US new-car markets during 2004–12, 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.
Item Type: | Article |
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Official URL: | https://academic.oup.com/ej |
Additional Information: | © 2023 The Authors |
Divisions: | Economics |
Subjects: | H Social Sciences > HB Economic Theory |
JEL classification: | E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E23 - Production E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles |
Date Deposited: | 11 Jan 2023 10:54 |
Last Modified: | 12 Aug 2024 01:25 |
URI: | http://eprints.lse.ac.uk/id/eprint/117851 |
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