Quality-Adjusted Prices for the American Automobile Industry: 1906-1940

58 Pages Posted: 13 Jul 2000 Last revised: 6 Apr 2022

See all articles by Daniel M. G. Raff

Daniel M. G. Raff

University of Pennsylvania - Management Department

Manuel Trajtenberg

Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: February 1995

Abstract

We push the span of hedonic price calculations for automobiles backwards towards the industry's birth. Most of the real change that occurred between 1906 and 1982 occurred between 1906 and 1940. During these years, hedonic prices fell at an average annual rate of 5%. The pace was brisker still during the first 8-12 years. Our measured declines can be decomposed into price and quality components. Our calculations suggest that 60% of the overall decline 1906-1940 was due to process innovation and only 40% to product innovation or quality change per se. Regressors representing mechanical systems matter in these calculations.

Suggested Citation

Raff, Daniel M. G. and Trajtenberg, Manuel, Quality-Adjusted Prices for the American Automobile Industry: 1906-1940 (February 1995). NBER Working Paper No. w5035, Available at SSRN: https://ssrn.com/abstract=225814

Daniel M. G. Raff

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States

Manuel Trajtenberg (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3640 9911 (Phone)
+972 3640 9908 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
47
Abstract Views
2,346
PlumX Metrics