Who is exposed to gas prices? How gasoline prices affect automobile manufacturers and dealerships

Meghan R. Busse, Christopher R. Knittel, Jorge Silva-Risso, Florian Zettelmeyer*

*Corresponding author for this work

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

Many consumers are keenly aware of gasoline prices, and consumer responses to gasoline prices have been well studied. In this paper, by contrast, we investigate how gasoline prices affect the automobile industry: manufacturers and dealerships. We estimate how changes in gasoline prices affect equilibrium prices and sales of both new and used vehicles of different fuel economies. We investigate the implications of these effects for individual auto manufacturers, taking into account differences in manufacturers’ vehicle portfolios. We also investigate effects on manufacturers’ affiliated dealership networks, including effects implied by the changes in used vehicle market outcomes.

Original languageEnglish (US)
Pages (from-to)41-95
Number of pages55
JournalQuantitative Marketing and Economics
Volume14
Issue number1
DOIs
StatePublished - Mar 1 2016

Keywords

  • Automobile industry
  • Fuel economy
  • Gasoline prices

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Marketing

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