Fashion, Styling, and the Within-Season Decline in Automobile Prices
Between 1954 and 1989 the seasonal variation in retail new car prices declined, while the annual percentage decline in used car prices lessened. To explain these long-term changes, this article suggests that a rise in the cost of a major model change has reduced the frequency of major model changes, changed the characteristics of new models, and resulted in smaller within-season price declines. New cars of adjacent model years have become closer substitutes as the importance of the annual model change has lessened. The American automobile has slowly become less of a fashion product because it has become increasingly costly to supply frequent styling changes. In contrast, the within-season price decline in women's apparel has increased over time as fashion has become more important. Reasons for the different price patterns are investigated. Copyright 1995 by the University of Chicago.
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- Robert J. Gordon, 1990. "The Measurement of Durable Goods Prices," NBER Books, National Bureau of Economic Research, Inc, number gord90-1, September.
- Pashigian, B Peter, 1988. "Demand Uncertainty and Sales: A Study of Fashion and Markdown Pricin g," American Economic Review, American Economic Association, vol. 78(5), pages 936-53, December.
- Allen F. Jung, 1961. "Indexes of Retail Prices of New Cars-Consumer Price Index," The Journal of Business, University of Chicago Press, vol. 34, pages 490.
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