Labor Unrest and the Quality of Production: Evidence from the Construction Equipment Resale Market / Alexandre Mas.

Format:

Book

Author/Creator:

Mas, Alexandre.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13138.

NBER working paper series no. w13138

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Labor Unrest and the Quality of Production

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

This paper examines the construction equipment resale market to assess whether equipment produced by the world's largest manufacturer of construction machinery, Caterpillar, experienced lower product quality in facilities that underwent contract disputes during the 1990's. Analysis of auction data reveals that resale market participants significantly discounted machines produced in these dispute-affected facilities. Additionally, pieces of equipment produced in facilities undergoing unrest were resold more often, received worse appraisal reports, and had lower list prices. Taken together, the evidence supports the hypothesis that workmanship at dispute-affected facilities declined, and that the resulting impact on the economic quality of the equipment produced was significant. The dispute was associated with at least $400 million in lost service flows due to inferior quality equipment alone.

Notes:

Print version record

May 2007.