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

27 Pages Posted: 5 May 2003

See all articles by Nicholas G. Rupp

Nicholas G. Rupp

East Carolina University - Department of Economics

Curtis R. Taylor

Duke University - Department of Economics

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.

Suggested Citation

Rupp, Nicholas G. and Taylor, Curtis R., Who Initiates Recalls and Who Cares? Evidence from the Automobile Industry. Journal of Industrial Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=313490

Nicholas G. Rupp (Contact Author)

East Carolina University - Department of Economics ( email )

Brewster Building
Greenville, NC 27858
United States
252.328.6821 (Phone)
252.328.6743 (Fax)

HOME PAGE: http://myweb.ecu.edu/ruppn/

Curtis R. Taylor

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States
919-660-1827 (Phone)
919-684-8974 (Fax)

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