Dealer Price Discrimination in New Car Purchases: Evidence from the Consumer Expenditure Survey
Year: 1996
Type: article
Study design: Observational Study
Abstract: 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. This may rationalize the disparate treatment of minorities by dealers documented in the controlled experiment.
Source: Journal of Political Economy
DOI: 10.1086/262035
Author: Pinelopi Koujianou Goldberg
Language: English
Subfield: Marketing
Domain: Social Sciences
SDG: Reduced inequalities
Open Access status: green
OpenAlex ID: W2048192129