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WILL RETARDING THE INFORMATION FLOW ON AUTOMOBILE RECALLS AFFECT CONSUMER DEMAND?
Author(s) -
REILLY ROBERT J.,
HOFFER GEORGE E.
Publication year - 1983
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1983.tb00646.x
Subject(s) - automotive industry , affect (linguistics) , consumer demand , business , economics , marketing , public economics , advertising , microeconomics , engineering , aerospace engineering , philosophy , linguistics
Recently the National Highway Traffic Administration changed its policy concerning the public announcement of safety‐related automotive recalls. This paper examines whether consumers continue to use recalls as an input in their decision to purchase an automobile. It was found that over the 1977‐81 period, severe recalls adversely affected the demand for the model recalled, while benefiting substitutes of other manufacturers.