Abstract
Attributes of differentiated goods in personal consumption have both conceptual and policy importance in macroeconomic applications that include obsolescence rates of capital stock, the savings rate, and environmental issues. While there is both direct and indirect evidence of variation in preferences for these attributes across countries, there is also conjecture that recent global integration has reduced this variation. We examine convergence between the U.S. and four OECD countries in the levels of automobile attributes over the 1970–1999 period. Results of panel unit root tests with the U.S. as the comparison country showed convergence in the constructed measures of size, performance and efficiency. In pairwise comparisons between the U.S. and OECD countries, results of our model estimations indicated convergence in size and efficiency with estimated half lives to convergence of between four to six years. Disaggregating the definitional components of performance, results show convergence in horsepower when selected economic variables are controlled. We find that measures of trade, per capita income and price appear to be among the mechanisms through which increasing global integration relates to convergence. Directions for further study of convergence preferences for attribute profiles across countries are discussed.
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Notes
I thank Frank Verboven, Penny Goldberg, the University of Leuven, and staff members of Katalog der Automobil Revue, and What Car? for providing access to unpublished data.
Unpublished data for this series were generously provided by the OECD statistical directorate. Income, demographic and trade data were from the U.N. Statistical Yearbook, World Development Indicators and Business Statistics. I also thank the statistical division of the World Bank for supplementary data.
I thank an anonymous reviewer for this and other insightful comments.
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I thank the Donald and Sally Lucas Foundation for its generous support of data purchases, data collection from print sources and data entry. I also thank Rahul Jain for capable research assistance.
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Silver, S.D. Convergence in Revealed Preferences for Automobiles as Differentiated Goods: U.S. and OECD Countries: 1970–1999. Atl Econ J 38, 3–14 (2010). https://doi.org/10.1007/s11293-009-9199-1
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DOI: https://doi.org/10.1007/s11293-009-9199-1