Japanese and Korean automobile exports and the Alchian-Allen theorem
This paper compares data on Japanese and Korean automobile exports to the USA to examine consistency with the Alchian-Allen theorem. The theorem suggests that imposing a per unit charge such as transport cost will lower the relative price and increase the relative consumption of higher quality cars. Empirical results show that the relative price of higher quality cars is not necessarily lower with increased shipping costs, measured by CIF charges (cost, insurance and freight). A possible explanation is that insurance and other shipping charges are imposed based on the car price, and these charges reduce or eliminate the Alchian-Allen effect of per-unit freight charge.
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Volume (Year): 7 (2014)
Issue (Month): 1 ()
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- David Hummels & Alexandre Skiba, 2004.
"Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture,"
Journal of Political Economy,
University of Chicago Press, vol. 112(6), pages 1384-1402, December.
- David Hummels & Alexandre Skiba, 2002. "Shipping the Good Apples Out? An Empirical Confirmation of the Alchian-Allen Conjecture," NBER Working Papers 9023, National Bureau of Economic Research, Inc.
- Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Borcherding, Thomas E & Silberberg, Eugene, 1978. "Shipping the Good Apples Out: The Alchian and Allen Theorem Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 86(1), pages 131-138, February.
- Banik, Nilanjan & Biswas, Basudeb, 2007. "Exchange rate pass-through in the U.S. automobile market: A cointegration approach," International Review of Economics & Finance, Elsevier, vol. 16(2), pages 223-236. Full references (including those not matched with items on IDEAS)
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