TY  - JOUR
AU  - Raff,Daniel M.G.
AU  - Trajtenberg,Manuel
TI  - Quality-Adjusted Prices for the American Automobile Industry: 1906-1940
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5035
PY  - 1995
Y2  - February 1995
UR  - http://www.nber.org/papers/w5035
L1  - http://www.nber.org/papers/w5035.pdf
N1  - Author contact info:
Daniel Raff
Department of Management
The Wharton School
University of Pennsylvania
Philadelphia, PA 19104-6370
Tel: 215/898-3804
Fax: 215/898-0401
E-Mail: raff@wharton.upenn.edu

Manuel Trajtenberg
Eitan Berglas School of Economics
Tel-Aviv University
Tel-Aviv 69978
ISRAEL
Tel: 972-3-640-9911
Fax: 972-3-640-9908
E-Mail: manuel@post.tau.ac.il
M1  - published as Daniel M. G. Raff, Manuel Trajtenberg. "Quality-Adjusted Prices for the American Automobile Industry: 1906-1940," in Timothy F. Bresnahan and Robert J. Gordon, editors, "The Economics of New Goods" University of Chicago Press (1997)

AB  - We push the span of hedonic price calculations for automobiles backwards towards the industry's birth.  Most of the real change that occurred between 1906 and 1982 occurred between 1906 and 1940.  During these years, hedonic prices fell at an average annual rate of 5%.  The pace was brisker still during the first 8-12 years.  Our measured declines can be decomposed into price and quality components.  Our calculations suggest that 60% of the overall decline 1906-1940 was due to process innovation and only 40% to product innovation or quality change per se.  Regressors representing mechanical systems matter in these calculations.
ER  -