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Estimating the Effect of Salience in Wholesale and Retail Car Markets / Meghan R. Busse, Nicola Lacetera, Devin G. Pope, Jorge Silva-Risso, Justin R. Sydnor.
- Format:
- Book
- Author/Creator:
- Busse, Meghan R.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18820.
- NBER working paper series no. w18820
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2013.
- Summary:
- We investigate whether the first digit of an odometer reading is more salient to consumers than subsequent digits. We find that retail transaction prices and volumes of used vehicles drop discontinuously at 10,000-mile odometer thresholds, echoing effects found in the wholesale market by Lacetera, Pope and Sydnor (2012). Our results reveal that retail consumers devote limited attention to evaluating vehicle mileage, and that this drives effects in the wholesale market. We estimate the inattention parameter implied by the price discontinuities. In addition, our results suggest that estimating consumer-level structural parameters using data from an intermediate market can give misleading results.
- Notes:
- Print version record
- February 2013.
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