Replication data for: Are Consumers Myopic? Evidence from New and Used Car Purchases

Principal Investigator(s):  View help for Principal Investigator(s) Meghan R. Busse; Christopher R. Knittel; Florian Zettelmeyer

Version:  View help for Version V1

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Project Citation: 

Busse, Meghan R., Knittel, Christopher R., and Zettelmeyer, Florian. Replication data for: Are Consumers Myopic? Evidence from New and Used Car Purchases. Nashville, TN: American Economic Association [publisher], 2013. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112589V1

Project Description

Summary:  View help for Summary We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates. Using different assumptions about annual mileage, survival rates, and demand elasticities, we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow. We interpret this as showing little evidence of consumer myopia. (JEL D12, H25, L11, L62, L71, L81)

Scope of Project

JEL Classification:  View help for JEL Classification
      D12 Consumer Economics: Empirical Analysis
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      L11 Production, Pricing, and Market Structure; Size Distribution of Firms
      L62 Automobiles; Other Transportation Equipment; Related Parts and Equipment
      L71 Mining, Extraction, and Refining: Hydrocarbon Fuels
      L81 Retail and Wholesale Trade; e-Commerce


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