publication . Report . Article . Preprint . Research . 2012

Who is Exposed to Gas Prices? How Gasoline Prices Affect Automobile Manufacturers and Dealerships

Silva-Risso, Jorge; Zettelmeyer, Florian; Busse, Meghan R.; Knittel, Christopher Roland;
Open Access
  • Published: 01 Dec 2012
  • Publisher: National Bureau of Economic Research
  • Country: United States
Abstract
Abstract Many consumers are keenly aware of gasoline prices, and consumer responses to gasoline prices have been well studied. In this paper, by contrast, we investigate how gasoline prices affect the automobile industry: manufacturers and dealerships. We estimate how changes in gasoline prices affect equilibrium prices and sales of both new and used vehicles of different fuel economies. We investigate the implications of these effects for individual auto manufacturers, taking into account differences in manufacturers’ vehicle portfolios. We also investigate effects on manufacturers’ affiliated dealership networks, including effects implied by the changes in use...
Subjects
free text keywords: Marketing, Economics, Econometrics and Finance (miscellaneous), Business, Automotive industry, business.industry, Gasoline, Commerce, jel:L1, jel:L2, jel:L9, jel:Q4, ddc:330
Funded by
NSF| Collaborative Research: Incentive Promotions in the US Automotive Industry
Project
  • Funder: National Science Foundation (NSF)
  • Project Code: 0550911
  • Funding stream: Directorate for Social, Behavioral & Economic Sciences | Division of Social and Economic Sciences
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NSF| Collaborative Research: Incentive promotions in the US automotive industry
Project
  • Funder: National Science Foundation (NSF)
  • Project Code: 0550508
  • Funding stream: Directorate for Social, Behavioral & Economic Sciences | Division of Social and Economic Sciences

1Je Bater and Brian Blackstone, \Data Indicate Faltering Demand," Wall Street Journal, November 26, 2008; Kelly Evans and Sudeep Reddy, \Capital Spending Continues to Fall," Wall Street Journal, January 30, 2009; Richard Truett, \September was awful, and 2009 looks ugly," Automotive News, October 7, 2008.

2\Tax My Products, Please," Wall Street Journal, March 17, 2009 3Keith Crain, \After 34 years, CAFE still doesn't work," Automotive News, May 25, 2009 4Richard Truett, \Mulally: Higher gas taxes would conserve fuel," Automotive News, August 8, 2007 5\Tax My Products, Please," Wall Street Journal, March 17, 2009 6The 2006-2008 run-up in gasoline prices coincided with the Ford F-150 pickup truck losing its decades-long position as the best-selling vehicle in the U.S. to the Honda Civic, a very di erent vehicle.

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