Econ paper on the Model T

[alexiskai]

Some economists from UMich recently released a working paper that looked at the impact of the Model T. From the abstract:

We ask (1) why the United States adopted the car more quickly than other countries before 1929, and (2) why in the United States the car changed from a luxury to a mass market good between 1909 and 1919. We argue that the answer is in large part the success of the Model T in the United States and its relative lack of success abroad. Mass production of the Model T began in 1913; by 1917, more than 40 percent of cars on the road were Model Ts. Cross-state and cross-county evidence suggest that the Model T opened up a new market for cars among farmers and in poorer areas of the country. Tariffs and difficulties producing outside Detroit made the U.S. success of the Model T difficult to replicate abroad, even in Canada.

 

[rotorwrench]

Distances of daily travel in Europe were many times within bicycle distance. Automobiles were expensive even if the Model T was relatively affordable. Most of it was likely dependent on economic reasons. Europe went through WWI and was still rebuilding from that. If a person could walk, ride a bike, or ride a bus then that was likely how most folks went about their daily lives.

 

[alexiskai]

Distances of daily travel in Europe were many times within bicycle distance. Automobiles were expensive even if the Model T was relatively affordable. Most of it was likely dependent on economic reasons. Europe went through WWI and was still rebuilding from that. If a person could walk, ride a bike, or ride a bus then that was likely how most folks went about their daily lives.

Right, the paper basically argues that cars were much more expensive in Europe, both in terms of nominal price and in the share of household income. Because the Model T was *so* cheap, it was able to make inroads as agriculture equipment. A large percentage of early T buyers were farmers, which was a huge departure from the target market for previous cars (luxury urban consumers). And because the T became popular at the same time as urbanization was really taking off, a lot of towns grew up under the assumption that their residents had cars. Which then required their residents to get more cars.

 

[ronn]

I know you are speaking of Europe and the US here, but it has often been discussed that the equivalent to the T in Germany, was the VW or peoples car.
Germany was severely set back by their economy as well as WW1, and hence was not ready for something similar to the T in the teens. They were going through a huge inflationary period, whereas the US suffered immensely in 1907, regarding depression.
It can be argued that financial success and failures were a direct result as to the success
of the automobile worldwide.
To this day, half of the world still doesnt have success regarding the automobile. Heck, many countries still dont have electricity. We dont realize how blessed we really are. And to think, this is a "hobby" for us on the Barn.........