Are Consumers Myopic? Evidence from New and Used Car Purchases
We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs f...
| Główni autorzy: | , , |
|---|---|
| Kolejni autorzy: | |
| Format: | Artykuł |
| Język: | en_US |
| Wydane: |
American Economic Association
2014
|
| Dostęp online: | http://hdl.handle.net/1721.1/87769 https://orcid.org/0000-0002-7654-8641 |
| _version_ | 1826193603344465920 |
|---|---|
| author | Busse, Meghan R Zettelmeyer, Florian Knittel, Christopher Roland |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Busse, Meghan R Zettelmeyer, Florian Knittel, Christopher Roland |
| author_sort | Busse, Meghan R |
| collection | MIT |
| description | We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates. Using different assumptions about annual mileage, survival rates, and demand elasticities, we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow. We interpret this as showing little evidence of consumer myopia. |
| first_indexed | 2024-09-23T09:41:44Z |
| format | Article |
| id | mit-1721.1/87769 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T09:41:44Z |
| publishDate | 2014 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/877692022-09-30T16:14:54Z Are Consumers Myopic? Evidence from New and Used Car Purchases Busse, Meghan R Zettelmeyer, Florian Knittel, Christopher Roland Sloan School of Management Knittel, Christopher Roland We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates. Using different assumptions about annual mileage, survival rates, and demand elasticities, we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow. We interpret this as showing little evidence of consumer myopia. University of California Energy Institute University of California, Davis. Institute of Transportation Studies 2014-06-13T16:02:43Z 2014-06-13T16:02:43Z 2013-02 Article http://purl.org/eprint/type/JournalArticle 0002-8282 1944-7981 http://hdl.handle.net/1721.1/87769 Busse, Meghan R, Christopher R Knittel, and Florian Zettelmeyer. “Are Consumers Myopic? Evidence from New and Used Car Purchases.” American Economic Review 103, no. 1 (February 2013): 220–256. © 2013 by the American Economic Association. https://orcid.org/0000-0002-7654-8641 en_US http://dx.doi.org/10.1257/aer.103.1.220 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Busse, Meghan R Zettelmeyer, Florian Knittel, Christopher Roland Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title | Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title_full | Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title_fullStr | Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title_full_unstemmed | Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title_short | Are Consumers Myopic? Evidence from New and Used Car Purchases |
| title_sort | are consumers myopic evidence from new and used car purchases |
| url | http://hdl.handle.net/1721.1/87769 https://orcid.org/0000-0002-7654-8641 |
| work_keys_str_mv | AT bussemeghanr areconsumersmyopicevidencefromnewandusedcarpurchases AT zettelmeyerflorian areconsumersmyopicevidencefromnewandusedcarpurchases AT knittelchristopherroland areconsumersmyopicevidencefromnewandusedcarpurchases |