SOCIAL REGULATION AND INDUSTRY STRUCTURE: EFFECTS OF FUEL ECONOMY MANDATES ON AUTOMOBILE PRODUCT DIFFERENTIATION

This paper considers the effect of regulation on industry structure, specifically product variety. A variety of products tailored to various market segments is viewed as a positive attribute of market economy -- consumers have greater choice, although product variety also facilitates price discrimination by producers. The study uses clustering algorithms to identify four distinct market segments, from luxury to economy cars. The data show that new car models since 1980 have become increasingly concentrated in the "middle" market segment, with decreasing share for the "high" and "low" end market. Thus, product variety appears to have decreased.

Language

  • English

Media Info

  • Pagination: p. 672-684

Subject/Index Terms

Filing Info

  • Accession Number: 00726858
  • Record Type: Publication
  • Report/Paper Numbers: Volume 2
  • Files: TRIS
  • Created Date: Oct 18 1996 12:00AM