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State Used Motor Vehicle Disclosure Laws: Do They Make a Difference to the Consumer?
Author(s) -
PRATT MICHAEL D.,
HOFFER GEORGE E.
Publication year - 1985
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.1985.tb00350.x
Subject(s) - quality (philosophy) , census , state (computer science) , business , marketing , survey data collection , economics , law , actuarial science , public economics , advertising , political science , computer science , population , philosophy , statistics , mathematics , epistemology , algorithm , demography , sociology
Because of recurring unfavorable consumer experiences, there have been a number of market and nonmarket responses to the quality uncertainty encountered in the used vehicle market. Several states have enacted used vehicle disclosure laws. This paper examines whether certain state used vehicle disclosure laws provide consumers with enough additional information so as to impact the quality mix of traded vehicles. The reported repair records of recently transacted vehicles in three states were examined: Wisconsin, Iowa, and Minnesota. Using Census data from the TIU Survey, pairwise tests of the equality of the mean maintenance expenditures of recently transacted vehicles from these three states were performed. Results were verified with a regression analysis. We were unable to find evidence that the currently mandated disclosure requirements in Wisconsin and Iowa were effective in increasing the number of good quality vehicles traded in the market. Our conclusions are drawn exclusive of any secondary benefits or costs that might accrue to the consumer and to society.