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Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey

  • Goldberg, Pinelopi Koujianou

This paper documents the variation in dealer discounts for new cars using transactions price data from the Consumer Expenditure Survey. Consumer-specific characteristics fail to explain dealer discounts, whereas model, market-specific, and purchase transaction variables (e.g., first-time purchase, trade-in, and financing through dealer) do explain them. The results contradict earlier findings of race and gender discrimination based on a controlled experiment. This contradiction is reconciled by examining the higher moments of the empirical discount distribution; while mean and median markups do not vary by race and gender, minority purchases are characterized by higher dispersion. Copyright 1996 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/262035
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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 104 (1996)
Issue (Month): 3 (June)
Pages: 622-54

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Handle: RePEc:ucp:jpolec:v:104:y:1996:i:3:p:622-54
Contact details of provider: Web page: http://www.journals.uchicago.edu/JPE/

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  1. N/A, 1980. "Chapter II. The Home Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 92(1), pages 18-32, May.
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  3. Latsis,, 1980. "Method and Appraisal in Economics," Cambridge Books, Cambridge University Press, number 9780521280501, Junio.
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  7. -, 1980. "Economic relations of Latin America with Europe," Cuadernos de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number ns.n. edited by Cepal.
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  9. N/A, 1980. "Chapter III. The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 94(1), pages 47-61, November.
  10. B. Peter Pashigian & Brian Bowen, 1992. "Why Has the Pricing of New Cars Changed?," University of Chicago - George G. Stigler Center for Study of Economy and State 82, Chicago - Center for Study of Economy and State.
  11. anonymous, 1980. "The New Zealand economy six monthly review," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 43, november.
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  13. Anonymous & Hillman, Jimmye S., 1980. "Macroeconomic Linkages to Agricultural Trade," 1980: Macroeconomic Linkages to Agricultural Trade Meeting, December 1980, Tucson, AZ 52378, International Agricultural Trade Research Consortium.
  14. Edward P. Lazear, 1984. "Retail Pricing and Clearance Sales," NBER Working Papers 1446, National Bureau of Economic Research, Inc.
  15. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-21, June.
  16. N/A, 1980. "Chapter III. The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 91(1), pages 43-67, February.
  17. anonymous, 1980. "The New Zealand economy - six monthly review," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 43, may.
  18. Timothy F. Bresnahan & Peter C. Reiss, 1985. "Dealer and Manufacturer Margins," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 253-268, Summer.
  19. N/A, 1980. "Chapter III. The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 93(1), pages 36-48, August.
  20. anonymous, 1980. "What’s wrong with macroeconomics," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum.
  21. N/A, 1980. "Chapter II. The Home Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 93(1), pages 20-35, August.
  22. N/A, 1980. "Chapter I. The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 92(1), pages 6-17, May.
  23. N/A, 1980. "Chapter II. The Home Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 94(1), pages 31-46, November.
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