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The Costs of Fleet Variety

Author

Listed:
  • Filip Premik
  • Dan Yu

Abstract

We study how heterogeneity in capital inputs affects firm performance. Drawing on detailed data on municipal bus fleets in Poland, we exploit plausibly exogenous variation generated by public procurement and nationally coordinated sales behavior of bus manufacturers to identify the causal effects of variety in fleet composition across brands and other technical dimensions. More heterogeneous fleets exhibit lower vehicle utilization and, for a fixed level of output, require more units of capital and generate higher costs. Our results emphasize that the pro- ductive capacity of capital depends on its internal structure, not only on its aggregate quantity or value.

Suggested Citation

  • Filip Premik & Dan Yu, 2026. "The Costs of Fleet Variety," Monash Economics Working Papers 2026-01, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:paper_1773881272298_419
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    References listed on IDEAS

    as
    1. Marshall L. Fisher & Christopher D. Ittner, 1999. "The Impact of Product Variety on Automobile Assembly Operations: Empirical Evidence and Simulation Analysis," Management Science, INFORMS, vol. 45(6), pages 771-786, June.
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    3. John Paul MacDuffie & Kannan Sethuraman & Marshall L. Fisher, 1996. "Product Variety and Manufacturing Performance: Evidence from the International Automotive Assembly Plant Study," Management Science, INFORMS, vol. 42(3), pages 350-369, March.
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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