The Nonpecuniary Costs of Automobile Emissions Standards

Timothy F. Bresnahan; Dennis  Yao

Article | RAND Journal of Economics | winter 1985

The Nonpecuniary Costs of Automobile Emissions Standards

by Timothy F. Bresnahan and Dennis Yao

Abstract

An important component of the costs of automotive air-pollution control has been nonpecuniary: a decline in vehicle performance characteristics. This regulatory impact on what the auto industry calls "drivability" has never been quantified, although there is considerable reason to believe that it has been a major component of the costs of some of the auto emissions standards of the last decade. We develop a methodology for econometric assessment of such costs, and apply it to the automobile air pollution standards of 1972-1981. We find that these costs are important. For the first standards implemented in the 1970s, they exceeded the costs of pollution control equipment installed on the car and the costs of decreased fuel efficiency. Since then, however, advances in compliance technology have allowed increases in automobile quality so that incremental costs of recent standards are much lower than previously believed.

Keywords: Transportation; Pollutants; Cost; Standards; Performance; Quality; Auto Industry;

Format: Print

19 pages

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Citation:

Bresnahan, Timothy F., and Dennis Yao. "The Nonpecuniary Costs of Automobile Emissions Standards." RAND Journal of Economics 16, no. 4 (winter 1985): 437–455. ((reprinted in W. Harrington and V. McConnell (eds.) Controlling Automobile Air Pollution, 2007) Harvard users click here for full text.)

In this paper we exploit a natural experiment resulting from self-regulation adopted in the ready-to-eat (RTE) breakfast cereal industry. This event induced product repositioning which compressed the relevant product space and increased competition. Through this lens, we assess specific performance impacts associated with the regulation and develop links between product positioning and product brand equity resources. The latter results provide dynamic connections between positioning choices and the value of resources as determined by consumer demand and market competition. As a group, products constrained by regulation perform relatively poorer than unconstrained products, though unconstrained products are also negatively affected by the increased competition caused by the regulation-induced compression. Among other results, we also find that higher brand equity is not always relatively more valuable than lower brand equity when products are forced to reposition.

Article | William & Mary Law Review | March 2019

Antitrust as Speech Control

Hillary Greene and Dennis Yao

Antitrust law, at times, dictates who, when, and about what people can and cannot speak. It would seem then that the First Amendment might have something to say about those constraints. And it does, though perhaps less directly and to a lesser degree than one might expect. This article examines the interface between those regimes recasting antitrust thinking in terms of speech control. Our review of the antitrust-First Amendment legal landscape focuses on the role of speech control. It reveals that while First Amendment issues are explicitly addressed relatively infrequently within antitrust decisions, certain speech (for example, speech that promotes economic efficiency) receives indirect protection as a byproduct of antitrust law. The potential challenges associated with indirect, rather than direct, protection of such speech are then explored. Significantly, such de facto protection does not, however, extend to speech furthering noneconomic values. We then consider some of the pros and cons associated with extending protection to nonefficiency speech values. Central to society’s improved treatment of such speech within antitrust settings is a willingness to recognize the pitfalls of the status quo, to undertake incremental change and to consciously cultivate learning. Perhaps the reality that such interface issues are only likely to worsen given the ever-growing and evolving information economy will get society talking.

Keywords: antitrust law; first amendment; Spoken Communication; Laws and Statutes;

Citation:

Greene, Hillary, and Dennis Yao. "Antitrust as Speech Control." William & Mary Law Review 60, no. 4 (March 2019): 1215–1267. View Details

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The Nonpecuniary Costs of Automobile Emissions Standards

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