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Do Geographic Entry Restrictions Increase Car Prices?

Author

Listed:
  • Walden, Michael L.

    (NC State U)

Abstract

Many states allow existing retail vehicle dealerships to challenge the entry of new competitors. Earlier studies found these restrictions resulted in higher vehicle retail prices. However, the studies used average vehicle prices or proxies for average prices and were not able to control for the numerous features and amenities that differentiate vehicles. The previous work was also conducted prior to the development of Internet shopping. This study tests the impact of state entry restrictions using a new data set that addresses these issues. Regression analysis finds that states having entry restrictions on new dealerships do not have higher vehicle prices.

Suggested Citation

  • Walden, Michael L., 2005. "Do Geographic Entry Restrictions Increase Car Prices?," The Review of Regional Studies, Southern Regional Science Association, vol. 35(2), pages 231-245.
  • Handle: RePEc:rre:publsh:v:35:y:2005:i:2:p:231-45
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    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/111/62
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    References listed on IDEAS

    as
    1. Daniel, Timothy P & Kleit, Andrew N, 1995. "Disentangling Regulatory Policy: The Effects of State Regulations on Trucking Rates," Journal of Regulatory Economics, Springer, pages 267-284.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Car; Dealership; Entry; Retail; Vehicles;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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