FTC Staff Comment Before the General Assembly of Ohio Concerning S.B. 103 to Enact Additional Restrictions on the Establishment and Relocation of Auto Dealers

~ 7-{ z
COi>l:\lE:\TS or FEDER~L TR-\J.)E CO\J~nSSIO~ST.-\rr
0:\ SE~ATE DILL 103 	//
'I r 	C"a;l'll'31' 	"'l"~ 'l''''ll''e''s 	-...: 	"1'" 	<:"'I''''t''' 	C")l"'~'Jr"'" 	("1 	H,,:,',,\,,,\,c'	.,... 	J..... 	..." ... Lot 1V ........ 4 	'-'... 	~ ..... 1 	~. '- 	J'-. J.f~..... 	... ......... 	l\.,........ 	(=-,1 \ 'L .....
The 	o?i:1ior,s 	J:1C 	Views ex?~essed :,e:-el:-l ;ne 	'.!:(;..;~ (If 	'.;1,;' 	"l,~, I 	,,; 	',,:,,'
Clcvclalld 	Regional 	Office 	and 	tl:e 	Bureaus of 	C:)~l:retltl(Jr:. C(.·;n,)~::l:er 1>:· ··~e::::.. ",
, 	,
SU::r:liL 	~.lt:Sl· Cj.)TT1:Tl\.,;;~L~ :t";
i .- -: " 	.,.
distributors.
the existing 	frcinr.:!":isc 	stCltUl~S 	inr.JhiL ~()mrC'~iLi()n :.lilli, i:l 	su l.Ln:;g, ;~!]";i.: ,:::<,'
for 	consumers. 	SB ~03 ap?ears 	li~el\' :0 com?cund 	~he ;ml;-com!,~~il:\':: :::"-;'':'"
uf 	lhe current 	lawS. 	Therefore, 	w(; 	urge 	t]13t 	tll.: 	3me:lcime,lts cor~t(line'~ :::
SI3 103 not 	be auopteu. Jnd 	\\'e re:.:om;l1~nd [}j;Jl 	yuu 	iT1:-'lC~C cun:-,iL!c:- 	k~i.'~:IL!(;i:
lhat 	w()uld rCjJc~l the 	eXIsting stanltes.
The 	FTC lS charged \vlth m<Hl1tCl1111ng ci.lmrctilion 	i1THJ pTlJll<lJIIg Ll;J1~L.!;:,-~'
;ron1 	restrai:1ts of 	trnde. 1 	In 	(lcc()rdancc 	with 	this 	role. 	t:1C 	FTC 	~ll1d :t~ S:;l,:"
submit comments upon 	request 	to feder:Jl, slate 	unJ 	lucal 	gU\(;rlllJ1Cllb T.) ;;(";:'.
ZiSSCSS 	the 	cOl;)pe~iti\'e and 	C()ll')\!~ler \\'C!(diC 	imi'iil'cl[iun::. (,f 	;.:>enc:ing 	re:;,.:::,:r: \'
i nitia ti Yes.
ill IS 	USC ~ 41 	~ lDI.'

has ~aineG substantial 	cxrCrJC:lc:: i71 	a:la:yz:r1g 	::1C 	l;1lrac< (;:" ":-\~lCI.::5 :-cs~:-~::::s
on competitio:-! 	and 	:~e L:()sts d::l: 	D<::ldiLs i,)f 'j,"c:n 	,C\Lr:..:.;r;h 	~lJ -':·);1~~:::CI". 	I"
recent 	ye~rs, ,l1~ FTC staff 	I:~s L"cen 	uivciveu 	;~ ::t;r:1::':::r .;: 	:s;:l;e::. s::,=c::~:c::>"
- 	.,
;u:-- 	\... .\::I:l~;I ....·. 	~ .... \...
fTC's 	Bureau 	of 	Econcmics pu~;llshed the 	results or 	,l 	stuJ\, 	(;If :::e 	'ElI'C; 	,1'
Sr~;je Emry 	Rq.;u/arioll Ull Re:~:.;:'l Al<TUlIlOin!e .'f.::,.;';':rs."2
Tht Exi~lin~ R:\IA Laws und The
St:nult Bill 103 Aml:ndml'nt.... HLlnn COI1~t1I11(.:r.,
;;;: -. ~ .•. , 1 ;-,	
- 	~ .... :--
rclccarc 	dc2.1crsi~\ps r:1usr gl\'C w:-::tC:l! 	-:iO£:c: 	~(\ n!! 	l:,\i,-:,lir:; ,~~,:;~T) ,;;:1.::-:::
v<:hick's uf 	tht' 	saDe 	mu;";'e 	'.\,::::::1 	t::e 	retev::l!:r 	n:;nke: 	'H'e::. 	~OJ:::..:: ~~';, C~:~2
§§ 451i.Ol(X), 451i.50(A).] 3 	A 	":-~;~\'3::r n:;u:-':ct 	Jr2a' is deL:',,:-;: 	'::5 :i:',:: 	~'.;"'::::
whhin 	a 	radius o( 	ten 	miles (rem 	:lJc SHe or 	the 	proposed 	7i2W J~'a:('r 	~O:ZC
2 	\Ve are 	D[Oviding 	,lle C:)mminee 	\\'Jth 	;1 capy vi 	{lus Sr;;:f Rei)on
(Attachment 1) for 	your 	inform:l:il)n.
The 	term "motor 	VCllIC!c" is dcfin.:.d ~n Obo Re\', Code 3 ~501.OJ(B) ~nc
includes ot:le:- seif-D[CDcJled 	vcl:ic:~s, such 	:1S ::lOwrc\,c!cs, :~:~!lufJcrLlrcj hc;]:~c;;
"nd 	recreatwnal 	vellic!es, In adc:7ioll 	lO :H!:omobi]Cs '2nd 	tr;:;:k,;;. 	Our CCl1';jr~':":,
ccncerning 	the 	anti·con:;:)(~r;{ vc :l:1:',irc (wc 	cff..:c:s cf 	Jllui-:.::r 	r2.S;;-~j:n; ~~r~
")~ 	\,c .... ~,ie •...., t~,p.s(> j ....... ,-..t,-..r "C "c~·-'s ... - 	\\'c:l	"r1!=,1, .1v. 	Lv 	Jl¥ ~ 	•• v.v 	••. ¥ 	,.;;, 	.,

'J 	., ~'1 , 	,1	
.... ~ ... ~ .. ' ~ .::..
? c l' 111 i ! , ill g : II (: CS ra b1ish 1ll CIJ: ~;( <l :) c \\' 	~_L: :J j l' ;- -:, j T'.~ T
cxislillg om.:. 	(ORC ~ ~5J~.5j):
\"'\. "'".'- ..., l)'-';-~ 0"' .. '"" .-~	./.. 	_ ~ l{ ......... 1 .....
. " 	"~	
.", ~ (~ .....
sp~ciiiC' 	grcum:':i fer 	,he eS:Jb:j,:;l;::~-('J:: 0f 	rc:!,xJ:~':n :)1' ,l 	,1:::11:::.:-:::::- 	;:~
lJOt.ificatlO11 	to ':>..i:-.ting 	ul';.:kr'>, ;;::d 	:0 enF 	r1:= 	~u:·~j~:1 uf ?,::::.)f 	~.::
',' .
.\ 	The 	rc:h;vant !Tl;Hk,:l ,Hl''-l 	(Ilr ded!::rs 01 	:::'Ir.~::':C!l.;l"ed :lO!"r.~S cr
rccr~atio1131 Vcllicies is cJcf:!'1('c 	1"1y n L1Uius ni :we~ty·fi\'e I:lile').
~ 	SI 'tl'(J- 11 j'::~7 ~1 T)r()V1U~S 	J. ~j"t ()f 	t'l'··(·r .....· r() l...;:;. I-,·'r'll··'j .. ··e(~ 	'~nl01l(1" OT.1,.I(':o.~.;:. :.':	'- 	-~_.~. 	1 	"'1' 	l( 	..;.}.'" 	L.. 	...." ,;,1 	~1 	;:- 	, 	.;) 	~~.
detcrmll1lng!I 	good C:lUSC 	e:\lS~" 	The":: 	lnc\<:,!e: 	(:) t::e 	e:;ecr GIl 	c~ 	~2~:',l:
motor 	veillclc business and 	th~ L'nnSUnllnc: public 	in ,11e 	rdev~ll1t 	m:llKer 	,;:',::~
('"') 	.\ 	tl'~" 	t 1 (> cst"'bll'sl' l'C'" 	( 	r,l"-.,,, 	,- 	-·I'··l 	"I, 	-,- 	..... 	, ..-'~ ,.,;; '.- ~	_ 	\\: 1e 	'':''. 	,1.... 	.. 	...',J' 	~'l 	Jr .(;l\.c,,(lnn ,'J 	<l \Je~, .... r 	'." 	~:l!dll,.H.:> O. ".e.:,,-,c .. '.
'0 ·'le p'I"I'e "l'eres t ' (') 	\\"'·"'1'- 	.J,. 	~\ .. (.- T .I~.\,~_,_ 	" 	.',,,, 	..• ~~~ -,.:-, 	." 	- .. ,	~ L... 	\. .....,,"' .....I.!o. 	... ~ _ 	l~ClJ L.. 	l,.l,; 	l,:,,~ •• I=- ..... ~ 	..., \..1 4 	_ ... ~ ;:'.~l.lo .. \'" ••••• : .... l..: .... 	, •• \.
rekv~l1t 	:n~lrket 	~H~~\ ;'Ire 	;)ro\,jJ:!J~ <I12C:":U~II(; C~~nln ,:ti;:;, 	,J;-,d cup.\e:-::':l::
CO!1sur:-:er care 	for 	vchicles: ;,::d 	(~) \\';~c~·h~:- :~C\' '\Jr~ j:::\;~::::~ ~:l:e::·.::::~ :::~~:-~:~:
per. e t j il :: <; n ;~ nd 	re';:'l res c!~ : :1 t : c, r..

. .., -
.: 	- - - 	- ~ -
- - -
, 	". _... ~	
. ~ ,~,-.
competition 	1:1 	rd~:; 	rr.~)tor vl:nic\: 	i1':<..lrkcl." 	In 	O)li,i. 	illl": 	SB :{;_~ ~l;;;l..:::~;::~;::~
"... Quid 	i~'l:;;:nsify rhe 	al::~·c8mi)e::tive JS~~eC5 i)i' 	!;1csc 	laws. 	-:-:1ec;;:: :0J;C:-,~.:;:-;.~~
Such 	pncl: increasc~ rc~ult frum 	the 	rc~lr<'lint l:ll; 	R~L·\ ;a"" 	:.'i~t,-;.· ',:;;
t'ret:::ullT!l 	lo ()fJt:n 	T:~W J<;ul~rships. 	By 	lirniLing 	m<..:n~(:JeL'.lr\::-s' (;-'-.,: ....;\):.: 	l
:ncreasc :11c 	C8S, of c:saisuti::g 	3utcmoGiics ;:\nd 	thcreby 	f3.::::':\:~ ::scs :::
few\::, 	Jl'~;(.;rs an()ng 	'''':"1()i'Tl 	L,) snup 	for 	h..:tLcr r:-iccs, ~\nJ :T.:l)' 	:'in;,,! 	L:-"'::'
travel 	f<.J.,thcr 	a:lu ~Xr)(;J,u mnl' 	l:mt::: 	in 	th<: cm.:rse ,if 	lhe;r sh()f'7'~:;~,
6 	These 	pnce incre::lses are 	most 	lIkely to occur 	in counties or 	1::2::C:-:'2.: :::::
are3S experier.cing <.l g::-c\V.rh in population, 	The 	rC5ulcs of 	:~lis FTC sr.:::; 	~~~~.
consistent with 	other 	s:uGles \\'h1C11 	show 	increased 	prices ;-csu]ting 	f,()!~, :-\\f.-\
Jaws. 	ill Eckan.l, E, \V., Jr., "The 	Ejfe::-r.~ oj Srme 	Awml10hiie Dcaler Emry
RegulmirJrlJ on New CClr PriceJ." 	E:"':()fwmic Tn(J\liT'v, Vul. 	XXIV, ~o_ :2 (Aprij
1985), pp, 223-~2; and Smith. R 	L., "Franchise Regularion: 	All 	fe-o/lomie
A.lla/vsis oj SiGle Res/rieriolls 011 A.//lomobi/( Dis:ribillioll," ]OUrl';;t! ,)! 	Ll\\' ;lrr"~
Ecoi10mics. 	Vol. XXV (/\.;)ri1 19H2), pp, ]~5-:i. 	Ohio expcric:;e~d vlrmail)' 	2;.';~;
population 	growth 	hetwe~n 1075 and 1')84. 	\Vithin 	Ohio, ho,,\'c\'cr, there 	2f('
many 	areas 	that 	have expeneneed 	popui::ltion 	increases. 	It is within 	tbe,e 	;;:::;:"
that 	RMA 	Jaws arc 	more likely to increase ,he 	price 	of 3u:cmobljes. 	!:;
addj[ion, 	future 	population 	growth 	will 	tend 	to 	inerc3sc 	tbe effect of 	R:\'I.\ 	::.:.\,,~
Sinc~ the 	reJ\:::Jse ()f 	lnl: 	BUfl·J.U ()f 	EC~Jn()m ics Sldf[ 	RC;)()rl, \YlJ<.1T ll;::
Econometric 	Forec::lsri:;g 	ASSOCJ:ltcs (\VEFA), ;l[ 	the 	rCi.jucst \Jf 	the 	~a[]()n~;:
Automobile 	Dc:alers 	Associatiun, has 	pf<;p,Jrl:d iJ fr;pmt 	lnul 	rcvi(.;\\s 	lh-.: S',I';
Report 	and c::;:dlenges its conc1lJ~i()n th,lt 	rric~:; of ;-lut(jr.;,OC:I~cS \\(;uld 	:-;,,~ ..:~ ;:
result 	of 	R~'1A L-l\'.'s in ;lfe<lS rJf growing 	PUpuhliun. 	\Ve 	,:1:: 	pr()"l~:~r;z 	',::.;
Committee 	with 	the staff's response to 	rhese 	ch;l1Jen~es (.-\::i'I::1fl;e::t 	:.)~ 	:<;:::'.
of 	the 	\VEFA 	G:~lcisms. ;11'::: showl1 	to 	~e inappr: 1 prJ;1Ie ;\n;: 	r:1J:sl::,;(:i~;. 	\\'l:-.-\'.)
"pec'l!·-'t'on ·:'·-'t 	rl'e 	St'i~· R"PC)11 	h'ls f~"''''''''''''C'-'l,p'l "nl" 	l"'" 	.-, n';', 	r'" 	._-	.. 	\" (,., J. 	\'1{~ 	.. 	'........ 	,\,.I.. .. J. • .....,.J,Jt.!~......... 	\,.; ......... 	1.'.-10 .. ·J 1 ,.(. •• : 	6.'.1.\ ... *-
areas Juve 	higher dutomobl1e 	prIces 	is snu'.\n 	~u be 	unluunJ::J. 	-

entry 	of new
dela)' 	rJ:c 	~~r~iblishmC:Ilt 	u[ d 	l:~\\ uc:a]crship by 	as 	1IlL:L:~1 as ::,1.\ :1l(;J:~:lS L;!:Cc.:~
(.·Ufri.:;'1l pruv;sions. 	Bl'L:aUSl' SB 	:(13 	\\()t..:.kl 	\:Xl"::lJ 	Lh<..' 	~1;;;-: \\ :::~ln \.... ~:cr. 	,!
~""'11··l~, "'1tIc;n"t,'d 	'f .I'IS t~111 n"'SS'$	L: v \,. \..' 	\",.:.... t..... 	1 ;-' U "'"" 	L 	~ ... 	... J. 	r l.. 	\...
c:xistJrlg 	dealer 	}ws an 	0r'J'lc)rtuni:y 	lu nl:g()l:'-1ll: ,:onCl:S)l()r:.~ :~':;m ;;:e
mur;ufuct·...:.r~r in set:"lemen: d 	tr:e 	protest. 	Tl:e custs 0: 	S::C:: ~~el:.:':s :\1:(
-'-'C" 	..	
. \..- ' ..... ~ .
..=. ... ',~ 	,-	
~ '-.. \ '-.... '_.-
R(lther 	:118.11 passing 	SB :03. we 	rL'Cllm::lt::-::': 	~.n;lt 	... ~",... ., ,+ ~~ -	
..... ,,./ ~ .. ::- .. '~, ..... -
repea1::1g 	the 	currea! 	R~lA la\\'s. 	Exist;ng 	Q(·,::-.:rs arC' 	T:;: 	::'..:e:y 	L.' 	-:-c ;:--,::: ~.:
hy 	i.;'e 	r-::;;eal 	uf these 	laws, c:x:(~:): \\hcrc 	::;\... :::,,"'S ::;)\C 	;"",-,:-~:::;:,.: <:;-'::.'
CUI".1petiti\'e 	?rofits,
111 such? 	l11<lrket.
1Il r~al ~statc:, inventur;' 	and 	personnel 	to req'..J:re 	c21reful C(;r:5:~1e:-~H!On of 	'.'.)::-.:
th(; 	mark(;t 	can 	hear. 	:-'1Clnufac!'drerS will 	likew:se 	avoid 	::;vc:-·satura:ing 111 3.
market. 	They 	have 	an 	interest 	i!1 sHong, stC\L;lc dC31crs, \\'cll-cst3bl1s;:d 	1Tl 	::-:C
cor..:mL::1Jty, whose goudwill \viE 11clp sell 	the 	proGue£. 	!=\lr:l:c:-, if ;)
In a :lll fa c: t u r erga j 11 S a 	ft..: p u 1aLi 0 n f lJf 	t rl: ali :l g l:.\. is tin g ul' ~ : ..: rs h~l(.l Jy, ; L \\ 1 1J :-- (;'
'; 	\V~ r.()l-: 	lhal 	th::: SH 103 <JHJ<;rldments :u the "good 	CL:se 	:~lcur:;
c:numerulcJ 	in 	Secll\Jn 	~::L~l 'lnd n.S ;lhu\'C include 	ddeli~g t;1e 	ef:e:: en 	!;,
reTail moror vehicle vusiness and rhe cOIl.5li!1!illg j)/lb/ic ill rhe rdelan! 	market
area" 	and 	adding 	the effect 	en "rhe ('Xi.5lillg 1/('\1' mOlOr ,'i:hi,';'t (hule,. uf rht:
same line-make in rhe re!cI'QI1I madel arm" 	Alrl":cui:Th § 4.:T:-.~1(13) :lS:S
'\v~e:her (t~e action) lS injur:ous or benef:ciCll 	t/; the 	pu~~ljc J:1tcrcst" 	3S .J.
",,()(),I ••·.. Ij".., .. ["'-'lor 	()m'~tI·r.('T ret''''!''''r.-e·o ti'e 	"'r';""ct 0'1 .:,"" 	~:'l'1Sl'"':''''' ~I':'.'!:	o 	U 	I.,.. oi.ol 	u. '-' 	" 	.. 	.. ~, 	.' 	- 	.. 	t 	'- .. \". 	1 	l 	'- 	'-' .. 	• 	~ r" 	. _
nl "'\' 	j'M"\n!\' 	I'nat cn!l-;umer 	\\elr;ne 	i'3<:'les 	\\,1'1·-:1 	'\'e 	1,C~''''\·'~ ,'··",,'c 	!,~ r·.' 	.,' 	.-	(.1 '" 	J..4I.-1.... 	- '" 	. I. 	~ ... \... 	\ 	v................ _" .......... ,.. 	_.......""
cancerr:, n:-e 	not Imporrant.

- :S -
difficult 	to find 	?e~ sons who arc: 	\vJl:::lg 	tel 	;n~1kt slgnifictEI 	(~ti)l:,':~ :::VC:>~::;-'::: ..'
in s~lcs ancJ 	5crV:C;:; facibties 	whell 	he 	:l\':cc 	rur 	;H':W JC::..li-.::-s <.1;:~I..·s.
\Vi!;10ut 	dee 	res:~·2.iJ1: :;1<1: :J,e 	1\.\1.-\ :<"1\.... 5 !~!:1(':: c:;} 	t!:~:;· ::~':l;t:- ::) :::-:<.:
\.:~.)f71retitjfJn. 	r.:ar.ut"a::urers can 	be 	:llC:'e 	reSpcES,YC 	to C8:1s~;n:er d.:::::::::::':.3.
fear 	that 	remcvir.g R\'lA 	L1W5 \\':~l 1:2rm CO:1SU:::C:-S '.':' :o"l.. e;,i::~ :::.: 	~'..;:c::::
:c:dcr se:\'ice 	is 	u:lfol.lndcd. 	CClJnpct::icn 	froP,') 	ck:J-:;~ 	C~[ (,[hn 	rr.:u::'..l~<jc:'.::·:::~
\' 	11 	I'ns"ur" 	'h'll 	cllnsu....., 	s 	-"eel'v" 	t\...., nl;x "t' Sel'\'l'''''' 	""""l;~\' ·...,'1".,···'· "')..-'	.'J 	•. 	... 	l" 	.. 	,.1 	,... 	• 	.l .. 	1 .. 	oJ 	~ ... '1" .... ",' 'I' ."... : 	'" '-
pr:ce 	they 	\va nt.
The E.\islin:l Ttfmilll\{iun Pruu:dun:s .-\nd
The Staatt: nill 103 Aml:ndmcl1Ls Hinoi:1' The
Development Of Effid~nt Distribucioll S~S{em5
seck 	preliminary anJ 	permanent 	inj";~leti\'e rcLef :n 5:2.:::: 	C:)u:-:. 	~OH.C
~ 45i754(C).] 	Under SB 103. dealer 	ter!111!13,tion 	disputes 	would 	h~ he2:-d 	~\:
).1otor 	Vehicle De~ders Board, which 	wDuld 	h~ [t>quired 	to commence 	a 	;l~2.!,::jl!.
within IRQ days of 	lh~ JeaJ~r\ protes~.
Like the 1\.\1.-\ laws, the 	tcrmin:1tlon 	prOVlSlons ()I :hc existing "t,llut;:
SB 103 may 	d~crc3.sc the ability uf 	manufuL'lur~rs to ~st;Jblish emu 	P.1,:intai:1
dfici\:nt 	uistributiun systems. 	Termin,ltiol1s 	may 	be 	based on 	the 	d~~kr's
failure 	to satisfy consumer dem~nd5, resulting 	ill 	poor saiC'<;. POOf service. :,:-.,~:
consumer complaints, or !llJrket conditions 	may 	indio.Ie 	,hat 	[c'.vcr dc:tl'rs
would 	make the distribution system 	more efficient. 	The 	notice 	and 	hCJr:i:t:
provisions in 	the current 	Ia'~' Clnd 	the SB 103 amend:l1cnts !'el11on~ the 	f!cxj;~:~;:>

.. =- -
...,
• 	i ..
= --- 	--- 	_.'--_#
--- 	-- 	------- 	=
necessary 	to
A.s [\ 	resu:t.
. 	.... ,.,., 	·l..c .. \s·e·..... 	.., 	~,.,.<:~O s·' 	.... 	., 	,-h"I''''''" 	;11	C:1 a_J,:, \... 	.... J 	., ~' .. L ,.... : _1 .... \,.. -' :-' 	..... I.. \ j U. '- H (.I .. =- ~ ...
..a ~ - .. ~ 	-	
"- ! 	; 	..
-d· 	b·' 	·.. t"' 	"'nd 	TIl·' .... "::, -r"r"r" 	"~. f'),.. .. D(l 	to' 	.,,,,\. 	r l. !' 	~1:,r~-..>r ".---	1S r r 1 U ~ j () n. 5 ~,) _ .LJ , (.\ 	l. U. I v .. ,,~Io,.. 1.... '" ~ L • .;. L 	\., \.. ..........1 	[" '- ~ r 	d \".. ~ 1=-........... 	\.. v.) .. ,:,
;:.ssoci~~ed 	wi~~ an 	ineffice:lt 5:- Sl(;!lL 	T}-:c::ie 	in:.:r~ascd 	C(lS:S are 	llk~:\' :,-) 	;~.s~;~:
111 lligil-=r 	prices 	for 	consUr:1~rs.
Conclusion
:n 	Obi:),
. 	. . 	. . .
c~)71:}le~l~lct: lj~ ;t.:~:·li: :-.:~..::c:- \'I...:.~':"·;:': ::::::'::~':.:'"
" 	-.	.. ~
bdicvc 	t:'at 	elirnin:.Hlng 	~he (Uric:,r :>t;,:tu~ory ::H'O\'lslons 	w()'.:ld 	b~l-:cfi[
cor..SUrrlers. and 	we 	urge 	you 	:0 (;::;nsiJc;' 	tl1Cil' 1'(::.)(;<\1.
'l 	The c!cvcn-me:1:bcr :\1L;[()r 	\'e:1iclc Dc~krs Dl)iUd. whic:-t 	would 	he:H 	~(;';::.::
terminatJOn 	disputes JS 	we!] 	(lS enrry pro{.;sls ~ll1dcr SB 103. conslsts ()r 	tJ1e
Reglstrar 	of 	~fotor Vchlcle<; :md ten 	InC'mhers ;lppoinrc-d 	hy the 	gOVl'rnor 	0:
these 	rell 	members. se\'en 	:nuSi. :l:-l\'C lxcn 	~ng,l~cd in 	the 	:l~()t()r \'-=hic!c 	r.c:s:::;;s'
- five 	in selling 	vehicles 	3t :ct:lil ;lnd :\\'() in 	\'~hicle 	lcasiliz, 	Or.!\' 	:~;:'C'2 ,.,(
the ten <'l"Jpolnred 	members 	~\r~ ::~ )t~ec:Lc.:l;1v rCDresellt 	:J:(~ ;J~8l:c. ~~!lC ::J ....".
may 	not 	:1avc 	he~;'l er.g0.~'2C ;" 	"e:!:~.g :~:c:tl)r' \-ch':e!es ~r ,::::2,'): 	iO:ZC; 	~.::--:..
~Janufact~lrcrs and 	(.hs,not::c;rs :Jr:: 	net 	leprc~cn{i,;d Oil 	the DO;I~d.

Ohio Senate
Sra:eMC'L;3~
:o:u,.~::):;s. Ct"'~I~ ~2~~5··:5Q~
Q~.1,450-aC82
:..'. ," . ,~ ... -:.:. .. .;, -.- -~_.
,"I .:: .'S'--;-'
Cooper Snyder
14:!l Olatrlc! 	G:'	I ,
It .:
l..
~r. 	~ichael ~ing
F.; de r a 1 	7 !' '" J c 	Cc :-r.l':l i ; sic:-,
11S 	St. 	Clai=e 	Ave~~c
Suite 	500
C:ev",l.::ll\;l, 	,..... 	. " .. ,	
\..'nl.C .... -..L...:,.4
~ :~a.'.;.~;t t~Gt:':':>':':1Y rrc~ ','0 1"::- 	~~';l:_~:~:-:-:t:=t~:: -it=:, ~ ~.'''';: '..:1 c;~ ~~('."'-l:= 3: __
(notor' v~;~l::2.t: ~~Ltl:::.;;c:cr:·J.r2:-:: ::::.:~r .J"::' 	re~:'~;.':::~::1e:--.~ ..: 	.:~."';Y :--lC~.;:':~~~~.
:. ~.;:) a::~':'~~ ':.;io.: 	':0\.1 c:..)l:\::·.\Jl'.:"':~:.a <i:':-2C:~~: ... __
:c- f=';:c:i:>l:'sr: ::.::l.2r 	??P~·:~!'.:1n~-~ 	~:()::.:~:
, -	-~
;;i \'::'81: 	=0 	::~:t: ::;(~:"ncus .. ,
C~ai=rr~n T~ci ~rg~'s 0i~~~~
~~74C00::lIH 	S:1Vce~
S::.::.te 	Sc:i~.:cr
CSf ~,'i
cc: 	':'he ~cnl~:f4;'l.~ :cti C,,::;];, 	Ch~:':'=::l~~:l t t-: 1..;;1\.~';'YS, 7r.):"ls::·:'rt~ti=r:
an~ Local 	Go~er~~enc
The 	Honcr~~lc Eu?e~e ~d:ts
- :. - -:--.-:. =.-. 	"''':''- ":,,,-.-:

A Response to Wharton Econometric Forecastinl;: Associ:3(cs' Comments
o nth e Bur e :l U 0 f E con 0 mi cs S (u d:: 0 f ReI e \ a n [ \ b r k ct ,A r C:3 L:3" S
entitled 	"The 	Effe'cts 	ot" 	S,:lte 	E:it~y 	Rcgul:ltj,Jn 	J:1
~ .: '.\ ::." "
:! n d :l" ri r m 0 u r ~ :l r lie r CJ nc:us ion 	: h :I t 	R. ~ 1oX l:l" s nJ ',' e :I 	:- =:; I ~ : '. e :::! e::: ;:. ::
into 	~~rc:: ~ ~ , r"\ ~ •
	\. : t- 	.
to 	Jny 	econome,rlC 	Jr,;:llysis. 	thJt 	,.. 	......... , ,_ 	I •
	_ ••. - • I 	I j .'
investigJted 	to 	sec 	if 	(hey 	CJuse 	chJnges 	1[; 	the 	cone::":5;'::1 	:~, c 	Sl:':':'
?;c~J.rcd 	by 	,-\lJn 	\1:1::':05, 	5l.1!; 	C::::'Ct:lICl
Economi:s. Feder:ll TrJce Cor.:mission.
~ 	\\'EF.A. ".-\n EV3JuJtion ot" the FTC's .AnJI\·sis 01 	t:"'e ct':'::::::: 'Ji' R..\14,
L:lws on 	,Auto :Vbrkcts" (JJ[;uJry 	198'7). 	The 	WEF,-\ 	report 	·).:l5 ;:ore:-Jr::::: 	Jt
the request of the \i3tionJI Auromobile De3!ers Asso.:iJtlon.
3 	5 t J tere Ie vJ n t 	m3 r ke t 3 rea 	13 ',l,' S j n ge ne r 3 I g ive e\::; lin g f r J n chi se j
3utomobilc 	dealers a 	right 	to ch31lenge 	est3blishment or 	rc:x:Jtior; 	by 	their
fr3nchisor 	of 	other 	dealerships 	within 	a 	cert3in 	disDnce 	01' 	their 	reIC\'3nt
mJrket :He:l.
4 	In 	3ddition 	to 	criticizing 	the 	5t3ff 	Report, 	WEF.-\ 	JddreS5es 	polic\'
re3sons 	why 	RMA 	laws 	m3Y 	be 	desirable 	and 	discounts 	3rgumenlS 	th:1!
suggest 	th3t 	these 	13wS 	'..,.-ill 	impose 	COSIS on 	socie:\'. 	The 	;:s~e ot' 	whether
R!'.1A 	13 ws 	r:l ise 	price, 	however, 	is 3n empiric:l! 	one. 	Thcr::;cre, 	w~ do 	not
evaluate 	wEFA's 	comments 	regJrding 	the 	policy 	issues 	bu: 	rJther 	focus 	on
the c r j tic ism s 0 f 	I he e can 0 mel ric 	mod c 1. 	\\-' e no l e, 	howe'" e ~. t:13 l l heW EF ..l,
report 	provides 	no 	empirical 	v31idation 	of 	its 	view 	Ih:!l 	R\lA 	!:lWS 	cenclit
consumers by IC3ding to higher quality service.

Report, 	Jnd 	3) comments 	thJt 	CJnnot 	be 3Jdrcsscd 	without 	Jdditior.:Jl 	·':J;2.
some 	of 	which 	C3n 	be 	'JbtJincd 	only 	(rom 	the 	JUto 	de3Jcrs 	thcmsc;"c~.
Before discussing 	c3ch 	ot the 	thrce 	t\,pes of .:riti,:isms (Se:tions 	II. Ill. Jr.C:
I V 	respe:t i vel y), 	Section
R;::,ort. 	Sc-:tion \. con.:!udes
I. 	The St3ff Report -'lodel
:hc 	5t3ff 	R.eport 	Je'.elopec 	J 	model 	ot' 	suppl: 	Jnd 	demJn,j 	Cor 	::c'·'
Jutor.lObiies. 	uSing 	19-:-S 	cross 	section 	d3tJ 5 	Unlike 	models 	dc\'clcpcd 	~:.
others. 	tlle 	StJfi 	Rc;)ort 	model 	tJkcs 	Jc:aunt 	aC 	the 	possitiiity 	':-:J,
11": 	p3rt 	due 	: 0 	d i1i- ere n t 	CO;) d i t i 0 fi sin 	I 0:: :1 I 	J. ~ t0 	r '.. , ... , ,	.... ~ ..J ••
Jny iniluence by JUto de3lers.
!J \\' S d epen .: i n g 0 n 'w' he the; 0 r not 	the 	reg ~ 0 n 1sex pe:- 1e n -: ~ r:; J. n ::"'i : ~ :: :. :, .~
popu!:1tion. 	This 	13tter 	consider3tion 	is 	e:urcme!y 	impor:3;l!.
restrict 	entry 	ot 	deJlers 	into 	:lfe3S 	where 	there 	IS 	zero 	or 	ncg},;'.c
popu1:ltion 	growth 	are 	likely 	to h:lVe 	no eCCect, 	becJuse 	in 	thJse 	JreJS 	It 	;s
unlikely 	lh:lt 	manuf3cturers 	would 	find 	it 	:n 	their 	Interest 	to stJrt 	;} 	new
de:llership 	3ny w 3y. 	Therefore, 	an 	econometric 	3nalysis 	th:H 	docs 	not
s 	This 	model 	is 	similar 	to 	the 	models 	of 	Smith 	J.nd 	EckJrd. 	See
Eck:lrd. 	E.W., Jr. "The 	Effects oi St:lte 	Automobile 	DeJ.ler 	Entry 	Regu!3tion
o nNe w 	C:1 r 	Prj c cs ", £ COli 0 m IC 	III q IJ i ry , V 0 I X X J V, 	No. 	::, (A p rill 98 5), p p.
::::3-~=, :lnd 	Smith, 	R.L, 	"FrJnchise 	R:gulJ.tion: 	An 	Economic 	An:llysis 	of
StJte 	Restrictions 	on 	Automobile 	Distribulion", 	lVI/mal 	0/ 	Lalli 	and
£ CIJ II ()" 11 C~. V 0) l\:\: V. (A Pr i I I 98:: ), p p. I:: 5- 5 '7

distinguish cetween :HC:lS with nq;:ltivc :lnct positivc growth is like::- 	,0 :'nJsk
some of th~ eff-:::t 01 R\1A l:lws.
The elf c:; t ,) I' R \ 1A l:l wson 	the p ric C 0 f ::lU: 0 moe ii c SIS cst j m:lt cd: rom
the 	;::>rlcc 	(supplyJ 	cqu3lion, 	wi~:'in J 	muitlv:!rIJ!e 	fr:!;T;c:-l,Cri-:. 	tn:lt 	:lc::,un:s
Iwr 	the 	effects 	of 	VJrJOUS 	(:l.:tors 	on 	prl.:e.
popu 13 t ion 	gro'-,th, 	t " ,-	" ...
.:: 0 n.:: Iud cst h J tin 	J rC3S C \ pc r :::: :J :: 1 n g 	p ,:) p U : J ~ 1eng r c '.'. t :-:, 	R '.1.-\ 	;:1"" s 	:... :: .. c 	~
l:lrge 3nd st:J.tisticJIl:; significJnt 	positive errc::t on 	the prIce 0i 	JutO;';0i..;:~CS.
This 	is 	the 	conclusion 	thJt 	\\EFA 	c!:lims 	is 	in\'3Iid, 	cecJusc 	3cc:::rcing 	to
"\·EFA. L,:: conclusion results from :l misspc.:ific3!ion of thc su~ply ;,;o':e;.
II. 	"'EFA Comments on the Econometric An:l!ysis
\\e 	3ddress 	first 	\\,[FA's 	Jsscrtion 	th3l 	the StJff 	Rc;:,crt's :::::.):10:-:-::::rl':
In::J1ysis 	hJS 	specificJtion 	errCiS. 	This 	is 	:l 	rel3tively 	C3SY 	::i3HT1 	:0 	~Jr:C
...... ith 	respect 	!O :lny 	economctri.: 	In:liysls 	I: 	IS 	more 	jiffi::..::t 	:.J C"2.~::.t~
After 	c3refully 	considering 	the 	misspecifi::ltions :lsse:-:c': 	by 	"VEF-\ 	'·\C 	:liC
un2bie 	to 	find 	3ny 	indiotion 	thJt 	the 	St:lff 	Report 	omitted 	:lny 	\:If!:1:':-ies
that 	would 	be 	expected 	to 	ce 	correlJted 	with 	R\fA 	l:l'...·s. 	Abse::t 	J
r C!:1 t ion s hip wit h R \1 A l:l w S. the 0 m ISS Ion 0 f s uCh va r i:3. bIesc Ie:l r i \. doe s not
:lfle..:t 	the 	V:J.lidity 	or 	the 	:l1l3Iysis. 	In 	:3.ddition. 	WEFA 	:lsserts 	thJl
re!:llionships 	among 	included 	'/:lflJbles 	C[ln 	Ic:ld 	to 	misleading 	or 	bi:lsed
results. 	We 	e.,<pl:lin 	bclow 	why 	this 	is 	untrue. 	Fin:lJly. 	WEFA 	mist:lKenly
cqu:ltes 	the 	total 	expl:ln3tory 	power 	of 	In 	econometric 	modcl 	with 	the
signifiC:lnce of :In individu:ll v3ri:lblc.

WEFA J.sscns (p. ·n thJ.t "Viewed 	from 	the 	perspeCtl\'e of 	its ::lbl::~:. 'v
c."(pJain rcglon3i 	vJriJrions In the ~e::ll~r ffi3rgln. [he FTC mod:! 	IS :1 f::ii'....~::.
The model introdu,:es 	lOS f:letors of which -;-Y:1 hJ.\'e:ln in·.:orrect (usin~ rTC
, ~	
J ••
\'C ry , 	~'
St:ltlS~i': C.X.IStS 	to 	uct::rmlilC 	en tire
[J.ctors 	In 	J. 	mod:::l. 	r3Kcn 	togcr:--e •. 	HC 	st:lt;stic::111y 	mCJnir,g:·ul.° 	E.::.:h 	:·1
rhe 	9 	equJ.rions 	:n 	the 	SrJff 	Report 	p3sses 	this 	rest 	J.r 	::10re 	rh::!n 	..... i~	
l" ....
sep:lrJ.rc 	rele\'1nr 	expl3nJ.rGry 	fJ..::ors 	indi\'ldu:lI!y. 	[wher:] 	rhe 	\Jr;GJ3
expl3n'atory 	factors 	He 	ir.tcrrc!J.tcc", 	This 	IS 	nor 	!rue,'
cxplan:ltory 	v3ri:loks 	do 	no: 	':J.use 	:n.:orre.:r 	estirr.Jrion 	(ti::!s:.
the 	estim::nion 	yields 	sign;;-i:::;nt 	cJeffi.:ients 	they 	1re 	perfe:rly 	~ .. '-
6 	This 	st::ltistic 	is 	'::lllcd 	:In 	F-st3tistic. 	The 	F-statisti.: 	is 	cased 	on
how much 	vari3tion in rhe v:J.riablc of interest is expl:lined by the f3.:torS in
the model.
-; 	In 	fa':t. 	if 	a 	model 	~JS 	inrcrrel:lted 	explan3rory 	v:J.riablcs, 	the
omission 	of 	any 	of 	these 	vari:lbics 	from 	the 	an::llysis 	will 	bias 	the 	results.
To 	3void 	misspc':ific3tion. 	it 	is essenti3] 	th3t 	311 	v:J.riables 	chat 	affect 	rhe
dependent 	vari3ble 	3nd :lre 	interrel3tcd 	with 	ocher expl3n3cory 	vari3blcs 	tc
included. See Pindyck, R .. 3nd 	Rubinfcld, D,. ECOllometrlc ,\fodc/s & ECOllonuc
Forecasts • .\1cGraw-Hill, 1981 (PP. 1:8-130).

-:orrect. 8 	Ani n t c rr :; I :ll ion s hip 	:l m 0 n g 	\ :H I:l b ic sis 	:l n 	~"( C' i J r. J t jon 	,~, ~ : '. 	! j r
why in d i v i d u J l:c, c:" f ic ie :l (S m J y J P Pc::l r tot e :ns; gr. i t' j CJ n L
J.nJlysis. 	the 	res:.:i:s con:c,nlng 	the 	inci'Jded 	;'Jctors Jre 	:;c, 	\':llic, 	T:-::5:5
11 0 t :ll W J \' S (r u c, 	T h t: ex -: Ius ion 0 f 	reI e '. J:l t \ J r: J cit: 5 b i J 5e5 : ~ ~ est i J:.:'. : C5 ,:;'
t h to: 	; n L Iud c d 	j. J .::: ~. r S o:'1I~· : 1 	( h c 	i ;).:! u dec 	:.:1': ~ 0 r S J ~ ;: 	,:: =- ~ : ::J l ~ ,j 	'.\" i I ;; 	. L. ro
excluded 	:lnd 	incl"dcd 	fJctors,
reg jon::11 	cos ts 0 f 	'J w n I n g J n d 	0 per:l tin g H\ 	Jut 0 m 0 'c ii e d eJ Ie rs hip 	s n() ~ i d 	L' c
included 	In 	the 	:'.:1:11'.5:5
. ~,
not 	differ 	in 	this 	WJ\, 	ther. 	the 	e5t:m:l:es 	octJined 	without 	.1.... ...	
~ . I ....
regior.:ll cost v3rlat:ies Jre unbiJscd.
WEFA su[Sgests thJt 	I', "	
I _
::>crformed 	''''''eli il 	For 	eX3mple. 	\VEFA 	Sl3tcS (p. 	:l) 	"the 	'Jbje:rivc 	(Ii 	,1-.. ...	
:'11 ...
8 	See 	Kmen:J'. 	J,. 	E!emelllS of ECO/lometrics, \1:lcmiIlJn 	Publishing Co,
~cw York, ~ew York. 	1971. 	KrnentJ St3!eS (p, 338) "Let us now e:omlne the
connection 	between the degree of multicolline::1rity and the properties of the
IcJst 	squJres 	estir.1ators 	of 	the 	regressIOn 	coefficients. 	Cndcr 	the 	basic
3ssumptions of the clJssiC3! 	normol 	linear regression 	model. the l::Jst sqUJre~
estim:ltors of the rqression coefficients h3ve ::111 the desirable properties,"
9 	By 	relevant, 	we 	me::1n 	thJt 	the 	vari3clc 	is 	importJr.t 	in 	exploining
the dC::ller price or t"11::1rg:n,
10 	See Pindyck, R,. 0 nd Rubin reid. D" 	pp 	1:8-130.
11 	R" 	indicates 	the 	perccntJgc of 	vari3tJon 	in 	the 	dependent 	v:lri3blc
cxploined by the model
;;
-'

FTC 	supply 	model 	WJS 	to 	explJin 	regionJI 	\JrlJtion5 	in 	the 	dC:llcr 	l1iJrgin
:lnd 	to determine 	\vhether 	in!roducing 	R\1.A 	I:lWS 	in'.:rc:lsed 	!hi:; mJrg:i'. 	II
esse n t i::li IY :l II the c:< p IJ n J to r y po w e r i nth C J \' C r :J. gC U:i; t rct:J. il ::' ric C C::.; L: 2 t 1J n
R\1.-\ ;2',\5 is c:;r!:--~:~, ~u:~:~·"··",,"",·
e:<plJincj by the St:lff Repon model (R"l, .s not :l re:c\:J.nt cons::.:rJriO:i
The 	WEFA 	JnJlysis 	:-:ext 	rurns 	to 	more 	subS!Jnti3J 	m:J. ttus 	~ ,-	
'J,
misspecific:J.tion 	The r:13)CH r:JissrcciCic:J.tiun citcd Lv WEFA '':2;] te 3n2!:.:e.:
III. 	Empirical In\estig:ltion of \\'EF~ Comments
The \\'EFA report c!J:rr:s thJt. r:uher th3n finding th3t R\:-\ 13\\5 res;.;';
;)opl:l:J.tion, 	the 	St:lff 	Re;:Jor: 	:ns 	r~:lily found 	th:lt 	either: 	I, 	m2rket 	Jre:!."
'.\' i t h 	I3 r ge 	:I bsol ute 	p (, p u f 3. t Ion 	1ncr e:J. s Cs 	h:l ve 	h ig her 	ret:1 ij 	r:< 0 to r 	\' C n. 1.: ic
prices. or :) m3.rket JreJS with old 	R\1A 	laws :lnd !Jrge aesolute popu!Jticil
;n:re:J.5cs 	have 	higher 	reni! 	motOr 	vehicle prices. 	In 	pJr;iculJr 	\VEFA 	notes
(p. 	4) 	thJt 	"since 	only 	l:J.rgc 	r3pidly 	growing 	cities 	h:lve 	;:Hgc 	:lesolutc
popui:J.tion 	incre3ses. 	the 	FTC 	mJy 	merely 	have 	docume:1ted 	th:lt 	w:lge 3n":
lZ 	This conclusion 	:lsst;mes 	th:lt 	there 	:lre 	no omined 	[:lctors 	rh:lt 	::Ife
correlated 	with 	the 	I3.ws. 	There 	He 	m:1ny 	examples 	or 	empirical 	models
where 	there 	is a 	low 	R 2 :lnd very reliable cCfe:ts on :3 specIfic factor. 	For
example. 	In 	examining 	C3rnlngs 	JCrOSS 	individu:lls, 	those 	who 	have 	more
experience 	e:lrn 	more 	th:ln 	those 	with 	less 	experience. 	The 	typical 	R 2 in
sU c h 	mod e lsi s 	:l p pro x i m:1 tel y 	.: 	yet 	the 	[ J c tor 	"ex per i c nee" 	iss t:l tis tic:l II \'
signlfic:lnr.
6

urCJn JrC:lS Jnd rurJI JrCJS,
The StJ.Cf Report includcd the ;CrCL'!Zlr.-.;:! ;:~Jngc in populJtion (whether
the ,-;i;.\lli:i:_' 	.:hJr.gc 	In 	populJt;on 	j"r 	JreJS 	Wl;~ grc'.... j;:g 	populJ.tion 	S.'10Cli"::
.
TJ ... - - - " 	.	~1 _ .... '_ 	; ,
t h tlt t his tim ~ \.,. e h ::l v e inc Iud e d :l \' 3 r i 3 b let h J t C3 P: u r ;.: s \\.: h c the r ::l n 3 r C::l :. 3 S
positi\'e Jbsolute popul::ltion gro\\th 3nd, i( so. ho'.\' 13rge 3n J8solute ~r8·"th.
pcr~:nt:!g:: h:1'.::: J posi[i\'~ Ci~~-:~ on .,
;JII,:~:.l""
\\·c 	h:1\'e 	31so 	rc-estirr:J.!~d 	the 	iGC;1tic:d 	s~;:~i!~i·:2.tion~ cx.:~~t 	th:}t 	~h:s
time 	use 	th~ pcr.:cntJ.ge 	, 	I·	J:l ;::>opu Jll::'"
otherwise.
growth :lnd 	R.\1A 13ws t·) ;'lr,.- 1"> C	
~ i ..... _-' 	g r .j \"- t h :::.J t
R .\1.-\ 	j J W s, 	The 	res u ! t sus J :l g 	t his 	Ii J. r :J tie.: 0 n Cj r r:; 	( he·.: 0 i'l .: jus ion 	: :-: J t 	J:l
growing 3fe::.s, R.\1A !:lws h:l\e J positive 3nd ,ignific::lnt erfc.:t on 	th~ price
of ::lutomotiics. H
The 	WEFA study suggests thilt 	it 	is more 3ppropri::lte to explJin CCJ!cr
m:Hgins rhtln to o:pl3in 	rerJii prices. 	\\'EFA clJims rn3r 	by including deJler
13 	The 	ne\1.,-' 3nd 	origin31 	regression 	results 3re 	presented 	in 	Appendix
A, ::llong with 3 brieC summJry of the findings reg3rding the !::lw v::lri:lbles.
14 	The 	regression 	results 	for 	the 	origin31 	3nd 	new 	specific:nions 	3re
g i ve n 	i n .-\ p pen d i .'( B J Ion g w i rh ::l b r i cf sum milr y 0 C fin din gs reg 3r din g the
law vari::lblcs.

.: 0 s t J. S 3 n ex p 13 n 3 tor y 	v 3r i::l b Ie. t h c R: of 	rh ceq u J. t ion 	is;' 1 g her J. n G 0 f :- c r s
3 mislc3ding 	indic3tor of performJ.ncc of :hc mode!. 	While V,le do not J£ree
\·... ith 	WEFA's clJim 15 . 	In 	the 	interest 	of 	completeness 	we 	hJve 	rc-estim3red
The 	results confirm our conclusion 	rhJ.t 	in 	growing :lre3S R.\IA 	13WS h3\'C :1
1\·. 	\\EFA Comments that Require Addilional OJta
V3ri3bks 	that He 3ssoci:Hed 	with 	the sDecific 17<HKet ::lreJ. (S.\lSA or countv
:~\'e!) thJ.n 	to 	use 	st::.tc'.\"ice 	:l\er::.gcs. 	For 	e:omple. 	\\·EF.~ suggests 	rh:n
who Ie s J. Ie - ret 3 i I [r:l d e 3 n C se r \' icc -sec: 'J r \\I:l ge r:l tes. v.. hie!: c::. n :: c c::. J c ~ ::1 r·2 ::::;
for 	311 	the 	m3rket 	J.re:J.s. 	It 	is 	not 	cleJ.r 	whether 	these 	"·::lri::.l::lcs 	"'c·~:.: 	~~C
T his w 0 u Id d e pen don 	h 0 \.... S j m i i H 	::. u to· d C:J. J c r W:1 g2 S :1 r c
wholes:l!e 	[r::lde 	w::lges 	versus 	no\V 	simi13r 	loc31 	Juro 	·:e::.ier 	'.1.:lges 	::Ire 	:.::.
statewide auto de31er w3ges.
15 	\\' e h a ve 31 re 3d y dis m iss edt her a leo f 	R: in e v 3.1 u 3. t j n g the 	j m p3 C t
of 	R~A laws on 	the 	price of 	motor 	vehicles. 	In 	3ddition. 	the econometric
model 	was 	origin::illy 	specified 	::is 	:J. 	dem:lnd 	3nd 	sup;:;!y 	eqU:ltlon 	for
automobiles. 	Consumers do 	not 	C3re 	3bout 	m:lrglns, 	they 	ore 	3bout 	prlcc.
It 	is 3.ppropri:1te to estim:1te the 	model 	with 	price :lS the dependent v::lriatlc
and 	include 	determin:lnts 	of 	price 	as 	explanatory 	V::lrI3bles. 	In 	fact .. 	by
including 	the 	cost 	of 	t~e 	automobile 	to 	the 	dc::ller 	JS 	an 	exp!:ln3rOr\
variablc, 	the 	Staff 	Repon 	is 	beIng 	less 	restrictivc 	since 	is 	not 	restricting
the 	cocfficicnt 	on 	this 	facior 	to 	be 	equ:l! 	to 	1. 	as 	is 	the 	case 	if 	de:1lcr
margIn is uscd as the depcnd:nt v3ri:lblc.
16 	The results of these regressions are given in Appendix C along with
J. brief summ3ry of the fincJr1gs regJrding thc l:lw variJblcs
8

WEF.-\ 	also 	suggests 	that 	it 	would 	be 	uscful 	to 	obtJin 	OJ,J 	j~ ... ~	
I l.,.' I
dc::tlerships over time and compare the prices 01' automobiles before the R\1.-\
IJws were passed to the pri-::es J(ter',>,,·ards. 	Tilc\ 	-::IJim that be-:::1use mJr.\· ct'
the 	poter.tial 	omitted 	\'ar::1cles 	';,'ouiJ 	r.ot 	-::~::::>g::::J\::r ::me. 	::-y 	-::Or.~;:Ji;r.;
PIOC- 	:1nd 	post-law 	prices 	we 	would 	:1\'oid 	m:::n:; 	pro::!ems. 	Whiie 	wc 	3gre::
l :l 	~. J. 2: 	1 n 	! ~ C 	~ i rn c -5 C ~ ; ~ s. 	.: :- 0 SS- Sc ::! 1'J n :J ! 	:J r: ::. ; ~, S 1S
suggcs:::::d 	by 	\"'fFA. 	the 	numL:c; 	01 	-::ross 	se'::lon 	obscf\:1tions 	l·jiCCc,e:1t
deJlers) \,.. ill far exceed 	the r.umber 0[' time 	pcriods (the number .J( \'eJrs 01
r :; g i 0 r. :1 i Ci f [' e , e n c eSin d e:11 e, 0 '.\ ncr s hip :1 n j 	0 p e i :1 tIn g cos t r:1 u St be;:" c ::: er : \
:lnd 	.:omplctely 	incorpor::ltcd 	intO 	the 	mo2cl. 	.-\ddition:111y, 	\\'fF-\ 	suggest:
th:H 	regional 	differen,:es 	in 	,:c:1krship 	oi::e. 	3:::::::S 	i7",:\ 	within 	i.13:-:CS. 	:::::1;C,
supplied aptions. ::Ind regIon:::; differences in ;c5;sIJtlon r.;USt be ir..:!u,':e::: 	-\::
dis c u ss c d :l b 0 v e . be C:1 us ,e 1,1, T F Apr 0 '.' ide s n 0 e '. Ide n c C t h:H the s e \' ar i ::I t ! CS J r'
sy-;,tem:1tic:111y related 	to the existence of 	R\1.-\ 	J:1WS, it C:ln:1ot be -::onc:ud:::::
tllJt 	their omISSion 	from 	the St::lff 	Rcport 	model 	will 	::If:"e:, 	the 	nlic:t·; of
the conclusions :lbout the effects of R\1.-\ IJws,
V. 	Conclusion
Al tho ugh 	WE F ,-\ 	h::l S C 13 i me d 	t h:1 t I h e S [J f r 	R C;JO rt 	m:1 y 	be sub jc CIt 0
spccificJlion error, WfFA 	provided 	no C."<Jmplcs of misspccificltion 	th:11 HC
likely 	to 	:lffecI 	the 	report's 	conclusion. 	WEFA 	cited 	:1 	few 	vari:1bles 	thJt
9

:HC 	not 	included 	in 	the :In:llysis but 	WEF.-\ 	provides 	no c\idencc 	th:l£ 	::-:CS;;
v:lri:lblcs differ system:l£iC:llly between regions th:lt :lre sub.lc,,:; to R\1.-\ :J''>'5
:lnd 	regIOns 	rh:lt 	:1rc 	not,:1 	neceSS:lry condition 	for 	ot:t:lining 	bi:1sed 	rcs:.;lE.
WEF-\'s 	spccul:1rion 	th:1t 	the 	St::ll"l" 	~:;;::on h:ls 	demonstr3red 	only 	:~J,
r:1 p i d I y 	g row i n g :1 r e:1 S 	h3 ve 	h i g her 	:1 u tor:: 'J [) i1cpr ice s 	h :1 S bee n s how n tor c
u r. fau r.ded.
on 	motOr 	'. eh lck 	prIces. 	Othe:- 	SPC~!I :'::J~lv:;S of 	th~ 	gro\\':h 	\'Ji::1l:ie 	:.sc
conjirm 	the 	effects 	of 	R\1.-\ 	13\\s. 	Fir: :1 !; y. 	~ X :l n1 i n :1 : i 0 :1 0 I 	.: : J ; e:- 	m::l :- ~ 1;, ::
instc:1d 01 	prices does not c!c::.nge the report"s conclusion.
10

Appendix ,.l,.
In this Jppendi-.; we report the originJi J:lC new estim:!tcs of the suppi\
::ll:s,.::i u;:::
JCfce, 	the coefficient on the growth 	v:lrJ:!cie, 	The results below re\e::ll 	th:::.t
....... ~
JbsoJute popui::ltion growth. I~GR J. is ;J05;tl\: ];..J SJgnJi IC::;-ot, 	In 	1·::C:. t;-;:
.m::l g nit u de J n d the Ie \' eI 0: 	s: ~ n j f j CJ. n ceo i' ,!i j,; c:: c ;' ric i : ;. tis I J r gCr (c r e \' c ~ :-
VJiucs gre:1tcr than or equJI lin Jbsolutc \3Iuc! ;0 	1,96 Jre :lgniiic::l"t ::H the
95:'0 	level. 	The 	t-\'3!UCS 	3re 	reported 	under 	the 	coerficic:lts 	::lnd 	3~pCJr in
p::l re:1 theses,
1:' 	To 	be 	consistent 	with 	the
trtlnsformed 	the Jbsolute growth vJriJble.
the lr::lnSCorm:Hion oC the AGR '.'JriJblc in
II
originJI 	specifie:Hlon 	we 	htlvc
The tnnsform::ltion is identicJI to
:he 5t:::.I'[ Report Ip, 6:),

The Estim3ted Regression Co~:·:-;.:ients for the Rct3il Sup;::>I:. 	Eq~3:;Jn
Cor the :"line Chc\y -\utO Body-Types (or 19"78
'Depcndent \·3ri3i.:'ic = Log of RC:311 Pri::;
'" ..	'-'-'
.68 i G
ROLD
lAGRO
1.-\ G R 1
-.1 G! '
( - 1.(8)
oi 'J3
i J~9'i
-.GO: -:-
(-0.83 )
- 1:53
(- :.10)
:::)1 :.1
I ~ . ~ 9)
1 ~ f' ,.	
.... 1 _1~O
), ~;O,
- 1.: .') J
-.09.11
1- i .'7 0)
I:,OQ ~
! .5 ~
- CC: S
-0.90 )
-. I .:> j "
:. -91 (1
f .5,":-j)
(.661
: 'J - 1
-J: i 8
-.C·3,'
JAGR ISQ -.5.3~8
(- i .91 )
PW 	.91)'7-:-
(69.S3 i
\\'-\GEO::1
.-\DV 	-,00~3
(- 3.61 )
D E:\S 	-.0039
( -5.":6)
GR 	·0031
1- .... 0 j
FORCE 	-0 I 35
1-:.53)
CA~CEL .OI7~
\:>.:>4)
LD 	-.0131
(. :,.: i')
-9.5: ... .1
(-.5. I .1)
.9162
i6'7:5)
0158
f j -6)
·0055
( -5.00)
-.00:8
(-4.! 3)
. 1'755
( -2.0:)
-.0162
( -:.'70)
.0::6
(381)
-.0 I 07
(-1,90 )
9306
.C203
-.0035
-00::
(- 3.38)
.0053
('7::;)
-.0 I: 1
! ':.39)
Oli:
(3.52)
-0160
(-3.14 )
I::
-:5-:--:-0
(·.1.:61
.938 I
0::;5
C 	_'j
-.0054
(-504 )
-.0015
i ·:.:6)
-.; 99::;
(·: ..11 )
-01-:-0
: -:.901
02-11
( 4.19)
-01.16
(- :.6 5)
- oJ I 	~
-001 ...
( - 1. I .1 )
cOI.1
( ! .95)
.i) ISO
( :96)
-oe'-;"I
1- ).11)
007-1
11.-18 )
-0 I 16
f.::.:::)
_ ; l'" \
: ~ s::
'-'-) 	;
- C03.5
.c:o: :
(3C5 )
-.1 - J I
( -l9'7)
·0106
(- ; .'7 -:- )
01..."
(:.:9 )
- 0090
1-15.1 )

The Es,imated Regrcssion Cocfficients for the Rctail Supply EquatIon
for the :"ine Che"y Auto Bod\-Typcs for 	19-8
(Dcpenden, \'ariacle = Log or" Rct:lil Pricc)
.69! ) 	.::. - -
ROLD
lAGRO
I.~GR i
.0 J 55
10.30)
... oo:~
" ~O)
1.59~6
i .106)
-0006
(-: ;1
-.0:60
{-0.51 )
.00: 1
0.: 5 j
:".155<;
\,4.60)
.i;O::
, . 8:)
·.0990
{·i.79)
0100
;. -00-
I,~ C:.';
-.CC::
-. J J S.1
(-:.: 1)
01:0
" ; .91 )
:.35(:1:
{~ 5S}
- >=·.15
. 	• I
.. '_: _ -"' i
! ... 32j
.. G95 i
1.-\ G R 1SQ -5.0:' ~
(-:.03 )
pw 	.9067
!90.34)
WAGE 	.0151
I. 1. 7:)
ADV 	-0021
(-1.96)
DE:'-:S 	-0007
{-1.l0)
GR 	.0108
( J .5.1)
FORCE 	.003 J
(0.63 )
CA:"CEL 	.0036
1.76)
LD 	-0087
1-1S2)
(-.16; )
.91 J 2
(8;.--)
.0::;;
-0035
(-3.1 7)
-.0003
( -0.56)
-.0768
(-1.0: )
0013
(0.2.1 )
.007 I
(1.35)
-0076
(- J .5.1)
·.16: ]
.01 -:
11.961
-.0027
(-2 ..1.1 )
-00: J
(-3.05)
0017
-.0 J 62
(- 3.::)
.0179
(3.68 )
-0121
(-2.37)
13
-77015
.95~C)
-'::;.95 )
•'"\-" 1	
. __-_.i 'I
-003;
(-363)
-.Ou I j
(-:.:5)
-0908
(-1.13)
-0 I 72
(- 3.1.1 )
.0:06
(3.83 )
-0 I 03
(- J .96)
: .. _~ I
. ":' --,)
'.'''' 	I
'- "\ )
<015
(-1.:'.1)
-iJC16
1-1.8.1)
.02 CJ I
(:.:':)
-0062
(.: .00)
.01:8
1:.09)
-0168
(.:.7'7)
_ 5
- .---)
-.0003
(-0 ..1 1)
-1.185
,-1.6.1)
-00; 5
(- i .17)
.0 J 83
(2.88)
-0 I 18
(·:0: )

Appendix A.
The EstimJred Regression Cocffi.:ienrs I'or rhe RctJil SL:::-;::-::- 	Equ::lrion
r 0 r rh e ~ i n e C ~ C\ Y .-\ u roB 0 d y -T y pes for I 9 - S
(Dependent \-JriJck=Log of RerJil Pri.:el
c 	556J
Chcvcne
~336 	.J i:3 	. ..:;:. ; 	.... - .-.
. - -' _:."
R ~ E\\
ROLD
lAG RO
I..;GRI
-00:5
',-8 I )
-.0672
(-1.03)
.0053
r 70)
i .9361
(4.33)
-00:-:-
t. -0. 7'71
-.J 03 '7
(-1.61)
.0039
11.18)
3.:553
(5.65 )
-.;0 -:-:
1- 1.6 I )
-o:SO
( -.:": )
.001 :
, .:;9)
... -' -.:
i 345)
-OC,SO
(-I.5S)
-.0331
(-0.-:9)
.0077
( 0.6:)
:.199:
( 3.59)
3033
; 159)
-.• 1".-	
.. .,.:-'--
3.: 53-:-
:.36 :
- - "-:.
10.5 - 1
. 	.-	- L'-~ .
I· _ .. _ ,
- ..	'_. __ I
lAGR1SQ -4.4453
(-1.54)
PW 	,9:89
(95.60)
\V.-\ G E 	.0 I 93
i 1.99)
AD\' 	-.0038
( -:.99)
DE~S 	-0005
( -.66)
GR 	-00::
(-.: 7i
FORCE 	-.0096
(-1.71)
CA~CEL .0 [86
(3.38)
-9.933~
(-5.21)
.9368
~88.95)
0:63
(:.8 I )
-.0057
(-4.81)
.0008
( 1.09)
-. J 941
(- ~.I3)
-.012 J
(-1.93)
.0246
(3.92)
( - 1.3 I )
.96.:9
/8967';
-. ...........	.1....1 	_
-.0056
(-:.76)
-.00 J S
(-1.7:)
-.0060
( --l6i
-01:0
(- I .60)
.0:::
(3.:5)
-'7.J6-:-5
1-3.69)
.9658
(SS:.: )
.Q336
1:.331
-.OOiO
( -3.96)
-.0006
(-0.61)
-.060:
(-0.63)
-.009'7
(-1.23)
.0:34
(3.34 )
- !. - - :_1
I _ .... 1 J
.9- ..:~
J ~ ;. -:
000:
(0.06)
-003-:
(-3.8:)
-.i)i69
(-':-01
-0031
i -. i 9)
.0 1:-1
(.79)
·15.~. ..:
"_' , _'" 1
(. 10 -:- ;
- CG-l6
(-:.33)
(-:.: 1)
-.:JOJ I
(-0.:5)
.0: 17
( 1.3:)
LD 	-.0212
(-3.93 )
-.0174
(-3.10)
-.0050
( -.6'7)
I •	. ~
-.0030
(-I)JO) 	I I.:; 7)
.Q3J-l
1:.1 S)

Appendi:-.: B
In:h i 5 	J ;) pen ci X 	\\ C 	r::;:: c:
T~c gro"'-th 	~:ltc
......... r 	-.~~,..,.~	
~ 	'l ...... :; ... 	,:lIe 	:0 	" 'I	
-"'\ I.
(' C the ,) t ~ C r \' J r iJ t j C:3 ;) r c ': '2: I ~ ;:: :l S l r. :: ': '.\;2;- C' 1;: t h ~ c'r;::;-: ~! i C ;::-,~ r t. 	! :
. ~ .:'~::. - - - .
:ll :he 95 c o level. The t-vJlues Jre repor:ec 	unc:er
In ~Jrcnlhesc~.
15

Appendix B
The Estim::lted Regression Coefficients :"or the Ret:: Ii Suppl\ 	EqL:::Itt<J:l
for the ~inc Che\y Auto Bod:--T:,pcs :";:,r 19-3
(Dependent \"JriJb!e = Log ot' Rcnd Price)
"l~:: i,U
ROLD
lAGRO
LA G R 1
~ , ,
I -, ':::" .... I
- j 013
(-1.68)
.0; 03
:CS69
-OCQ
(-98 ')
-.1091
(- 1.8-1 )
.0 I.:
\ 1.65',
[-1.691
(- i 1bl
-09-11
(-1. 70)
.0095
, ;50)
i ! -,	
t ..... J 	;
(-I.: I;
-.1060
(-1.93 )
.0 1 09
1.6939
("':.1.J)
,~:'.;.' -
·J395
'.. 66 )
r '"'\ ,'-
-.U'JO·
: - 9 -:-)
..., ........
"-' - - -
_S "
.J 1~ 'J
" 	,
... - ~ - :
~ '.'.8'-' I
IAGR lSQ -5.3~3
(- 1.9 I )
-5.39
(-1.93 )
·~.5),'J
(-1.:5)
--1.619
1-: 73)
-9; 69
, 	.-	, - - ~-
pw 	.90'7:
(6983)
.90S
t69.:8l
.C; 1:
1 ... - ,	
{ J .~;'.J
.9306
! 77.80)
0:':3
i 	_ ':
0°:6
. C.:J -;_
-c; 	s
ADV 	-.00-13
(-3.61 )
DE~S 	-1-,039
(-5A6)
GR 	-.0031
(-.-W)
FORCE 	-.0135
(-:.53)
CA:--:CEL 	.017-1
(3.3-1)
-.00-13
(-3.66)
.0039
( - 5.": I )
-.00:-1
(-.30 )
-.0133
(-:.58)
.0 1;7
(339)
-.0033
(-3.-13 )
-00::
(-3.38 )
.0053
t. '73)
-01: I
( -:.39)
.01-;:
(3.5: )
-.0389
(-3.5-1)
-00::
(-3.3-1)
.0050
(.66l
-0 I 25
(-:'-~5)
.0177
(3.59)
-.001-1
(- 1. I -1;
001-1
( 1.95)
.0 150
(1.96)
-.0071
( - I .-1 I )
.00: -1
(J.-18)
<0 	-
, - I . - _ :
-00'75
(- I. -19 \
.0080
( J .60)
LD 	-.0131
i - :.-1;)
-.013:
(-:.-13 )
-0160
(- 3. I -1 )
16
-0 J 61
(- 3. I 5)
-.0116
(-:.:: )
-.0 I 16
(-:.: 3)

Ap;:-e:-:dn B
The Estim:1t::d Regression Cocffi'::Jents I"or the Re::lii Sv:;;::: E::;u::,ion
for the ~in:: C;,c"y Auto Body-Typcs for 	I S-S
(Dcpendc:1t \":1riJble=Log of Rct:lil P~iC::l
\10ntc C::r1o
.'\ I.~
ROLO
i:~GRO
-CC06
\ -:0)
.0 155
(0.30)
C f"\~'	
.... v_~
(-JO)
(4.06;
-.COC:~
.0095
( 19)
-0017
. -: S)
i': r) 5)
-.0990
(-J. 79)
,'J! 00
! : .5 S)
-0G:3
'-. SJ I
-1036
(-191 )
',; 106
I 6°5:
i 4(.0)
- ~ 5
::5)
, " - i
_. 	i
00:-
-r>,	
._ J J
.... r, ......
. . ':'~:_'
f-\ G R j 5 Q - 5. 0 ~ ~
(-2.03)
P\:; 	.9067
(903~)
.. AGE 	.OJ5!
. I ."7 2)
.-\0 V 	-.00:1
(-1.96 )
:) E:-<5 	-.0007
(-I. 10)
GR 	.0108
( 1.54)
FORCE 	.0031
(.63 )
CANCEL 	.0036
(.76)
-5. J 4
( -2.08;
.90: I
1903:)
·176:,
-00::
( -2.00)
-0007
(-1.01)
01:1
( 1.65)
,0031
(.63 )
.0037
!.7 8)
.9.:95
'S 1.9:)
" - ...	...... ! 	-
-00: 1
(-3.05)
.0017
(.:3 )
-.0162
(-).:: )
.0179
(3.68 )
-4.66": I
!. -I. -; 4 i
-.00: -:
(-:.48 )
-00:0
(-3.00)
OO:i
(.: 7)
-.0163
(-3.:3 )
0180
(3.70)
... c. -,,_
. '" _ i
... ~ I; 15
! -i.J..t)
-':),J: 6
i -!S~)
.0:0 I
r :.::)
-006:
r -1(0)
.01:8
(:09)
-,0016
(- j .1 : :
-0015
(-1-:--)
.0193
( :.05)
-.006:
( -.99)
.0 I 28
(:.10)
LO 	-.0087
(- 1.8:)
-.0088
(-183)
-0 I ::: I
(-:.37)
-.01::
(-:.37)
-,J 16S
(-:. -;7)
-.0168
(-2.73 )

•
:-\;:>pC:1dix B
The ESllmJtcC Regression C::,cfCicienls (or the RctJiI Supply Ec;:..::::ion
l'ur thc :"iinc Chevy Auto Bod\'-T\~es for 	19-5
/ Dependent VJr:Jble=Log or RCIJI! PriC:::::l
,-
C' ~l C \" C ~ t c 	SpOrt·.J:J
.::..:5 	.., I'
R:---: E \\'
i -S I)
C}O:6
I -S:)
-,0077
i - 1.6 I ) 	! .:0.'
,-I.
1.- i
ROLD
lAGRO
IAGR iSQ
PW
WAGE
AD'v'
DE:---:S
GR
FORCE
-067:
(-10.3 )
COS:;.
i ,-:0)
i ,9S6!
i - J.5J)
·9560\
JI9S
, 1. 99)
-00.38
( -2.99)
-.0005
1-,66i
-00::
I 	..... '"':"	
,,-.- .)
-.0096
! -1.7 1)
-as J 3
(-1.:6)
.C069
'.93,
1.9853
( ..L.31J
-..U90.3
(-1.55)
.9292
195. J6)
.0:0 "7
( :.08)
-.OOJO
,- 3. J 6)
-0006
(-"i 3)
-,0053
(-.62 )
-.0 I 0:;
(-1.30 )
-.0:80
t. -.:J)
.001:
, ~9)
1.73:3
13,J5 J
-369-:
( .. 1. 3 I i
.96j9
( 89.6-:1
o~-~
( 1391
-.0056
(-2.76)
-,001S-
(- I."i:)
-0060
(-.J6 )
-.01:0
(-1.601
.. 0353
1-,3! )
-3.7050
(- 1.3 J j
965:
i S9'.'di
, (-'	
I. ! .... _... ,
-0057
(-:.83)
-.0019
( .. 1. '73)
-00'71
(-.53)
-01::
(-162 )
\ 1.69)
-o..:c:
1_ i .95'
.. ; 5 S-
,:,36,
( 	- 1 '	-._ I •
. - r --	I': "'!. _
.; 5:
oeo:
(.06)
-003 -;
(- 3.3:)
-0169
(- -; 0)
-0031
(- 19)
(I, _)
:. :: - J
l01	, . _ i
-.oess
(- 38:;
0 ......... '-)-
1- 93)
-.0035
(-.:: )
CA:-':CELO 136
0.38)
.0:::
(3.:5 )
O::j
(3.:8 )
.0 l:j
(,79)
01:6
(.80)
LD 	-.0212
1-3.93)
-021:
(- 3,9:)
-.0050
(-6'7 )
18
-.0050
(-68 )
.0:::
( 1.3 7 )
.0::::

·-\ Ppen d i x C
In 	tnls 3prendix 	we rc;:-ort the estJ!7:3reS of the .jeJ.lcr ;;urgin equJ.:ior..
c· rig in J.l 	;:-:) w (h 	\. J. r I J. :-1 e I 	'x 3 S 	I..! 5e din 	( he 	J n J : '.:: ; ::.
ex p l3. n J. (0 r y 	\' H j ::l b lc S ::l red:: :- i ned 	::l S (h e y 	we reI n 	,h C oJ rIg: n J i r :: ~ 0 r l. 	The
~ .
. "'-
"" ': .::: ,:.. ~ '\. 1 •
of 	the 	9 	r;; 0 eel 	(y pes 	(he 	i n (e r::l C( jon 	or 	(he 	;::l W 	J n cpr:.;. c; , :: ( 1(., ,,2 ~ ::''' : i~
3ppeJr in ;J3renthcses.
19

.-\ ppend ix C
Th:;: ESlim3tcd Regrcssion CoclficienlS (or the Rct:lil Supply EqUJtlOn
lor the :--Jinc C:'cvy Auto BOdy-Types Cor 19-:-8
(Depcndent VJri3bie=Dc3l:::- \1:Hgin!
VJ ri:l ',' Ie
\ 10n Ie
e:lrl,) 	\hiii:'u
C
ROLD
lAGRO
IAGR.l
-.1795
(-3.01 )
.0195
(: 85)
I - - 	-	
J. ,_
-.00:5
( -038
- I ' 1 I
\ -::.40)
.0139
I, :.:: 1}
13.5'7
- ! 7 ! ~
1-3.05 )
:J183
,:s·n
,":993
;;0::3
'090 ,
.0 I))
-0037
! -0.5": I
(·'J.O~ .
. j .:5,
<9:; 5
(- j S5;
.0 I 06
i 	-:- S)
I _ . .) I J
IAGR1SQ 	-5."76';8
(-1.98)
\VAGE 	.OJ9:
(::.0-1 )
.-\DV 	-.00-4:
(-3.~:' )
DE:"S 	-/;033
\--4.-47)
GR 	-.004!
( -0-19)
FORCE 	-.01 if
(-3.:2)
CANCELO:Oi
( 3.87)
LD 	-0197
(-365)
J Q' ~	
...... -_.I
(-IS::)
( :'.:3 1)
-.00::-:-
(- :."::: I
-.0016
(- ::.3 4'J
.0013
(0.171
-.0188
(- 3."7 I )
.0188
(3.8: )
-0161
(-3.!5)
-J -:: 86J
(-1-::'3 )
~:81
(3.1 I)
1_ 3.551
- CQ:0
(- ::.8 8)
-0186
(- 35"7)
.0230
(4.53 )
-.0:38
(-4.64 )
-';.65 :0
(- 359)
-.,J08 -;
t-O.96)
-X1S
(-155 I
.% i":
(:.O~ )
.0098
-0081
(-1.61 )
.0090
( 1.8:)
-.0 I::
(-: ..19 )
-... S~--
(-1.85)
.C3 I -
i ),59 j
- " .. ,..	_.'-- '....; -' -'
hj] Sj
0114
! ;..: 8)
-0064
! - I:: 8)
'J 1 ! 8
(: ..104 )
-o! 84
(-.3 -;- 8)

Appendix C
The Esrim:ltcd Regression Coefficie~ls ior the RetJil Sup;:-i:, 	Equ::ltion
for thc :--iine Che\'y-\ulO BOdy-Types tor 19-5
(Dependenl V:Hiacle=De:l!er .\!:lrg:~,
C
K \: E \\
ROLD
IA.GRO
:.-\G?,
'Ii ........	
-.'~.-1 __
·.:·oso
, - :.1 S )
(- I .95)
.0 I 49~
i 1.761
1 .... ~1	
• 1_ ..... I
·OC6:
(-; 'J 5)
·1596
(-:.-44)
J16:
(:. h)
- : -I ... j
I- 1. SO)
-.10°6
1.-:.0:)
0109
\e.s-:,)
:~::
, .. -. )
l.-\GR: SQ 	.79-:'3
i O.:~)
\\',-\GE 	.GO=:-:-
t2.05)
: - J .8 I )
DE\:S 	-0014
(-1.50)
GR 	.0181
( 1.83)
FORCE 	-.0 1:.15
(-:.2-1 )
C.-\:--';CEL 	.0:06
(3.31 )
LD 	-.023 i
(-3.80)
-j: 036
(- 136)
.0360
(3.61 'j
(-4:5)
-.000-1
(-0.5-1)
-.0055
1-063)
-o! 45
( -:.50)
.02·n
(oJ.33 )
-0:44
(-j 35)
- 3.95 j ,
I-I.·WI
.03: J
(:.05 )
-006 '7
1-3-11)
-00 I j
(-1.:3)
-0080
(-0 60)
-.0146
(-1.98)
.0243
(3.6 J )
-a 103
(-1.45)
. _ ••. ::..: j
. - ,	
• '..... . _- J
.' 	I
" 	,
-r:::: 3
, .~ ;:)
":<):9
; '::.! 8)
.~. 19
; O. -6)
i 139)