Environmental Change and Hedonic Cost Functions for Automobiles
This paper focuses on how changes in the economic and regulatory environment have affected production costs and product characteristics in the automobile industry. We estimate cost functions characteristics. Then we examine how this cost surface has changed over time and how these changes relate to changes in gas prices and in emission standard regulations. We also briefly consider the related questions of how changes in automobile characteristics, and in the rate of patenting, are related to regulations and gas prices.
Published: Steven Berry, Samuel Kortum, and Ariel Pakes. "Environmental change and hedonic cost functions for automobiles," Proceeding of the National Academy of Sciences, Vol. 93, No.23, pp. 12731- 12738. (November 12, 1996)