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Essays on competition and consumer choice

Habte, Osmis Areda LU (2018)
Abstract
This thesis makes a contribution to the areas of deregulation, competition and consumer choice. It consists of three self-contained papers. All the research questions are examined in the context of the Swedish motor vehicle inspection market.

The first paper, Competition Makes Inspectors More Lenient: Evidence from the Motor Vehicle Inspection Market, investigates whether increased competition motivates monitoring firms to relax the standards of the inspection to their customers. We hypothesized that the fear of loosing customers to competitors may incentivize firms to provide a biased inspection services. We employed fixed effects and fixed effects 2SLS analyses to identify the relationship between competition and the probability... (More)
This thesis makes a contribution to the areas of deregulation, competition and consumer choice. It consists of three self-contained papers. All the research questions are examined in the context of the Swedish motor vehicle inspection market.

The first paper, Competition Makes Inspectors More Lenient: Evidence from the Motor Vehicle Inspection Market, investigates whether increased competition motivates monitoring firms to relax the standards of the inspection to their customers. We hypothesized that the fear of loosing customers to competitors may incentivize firms to provide a biased inspection services. We employed fixed effects and fixed effects 2SLS analyses to identify the relationship between competition and the probability of passing mandatory car inspection. The results show that firms become more lenient to their customers when they face increased competition from their rivals.

The second paper, Opening Hours and Competition: Evidence from the Motor Vehicle Inspection Market, examines the effect of competition on an inspection firm's incentive to provide longer opening hours. This paper uses a unique station-level panel dataset and addresses the potential endogeneity of market entry decisions using 2SLS analyses. I find that increased competition between providers leads to expanded service opening hours.

The third paper, Deregulation, Choice and Competition in the Motor Vehicle Inspection Market, estimates a model of demand for car inspection services to investigate car owners' station choice behavior and its implications for competition. The paper further evaluates the effect on consumer welfare of removing the state monopoly on inspection services. The results indicate that distance is an important determinant of station choice. I also find that consumers respond to price, opening hours and station size. The improvement in spatial accessibility following the deregulation increased the welfare to the average consumer by around SEK 100. (Less)
Please use this url to cite or link to this publication:
author
supervisor
opponent
  • Professor Bergman, Mats, Södertörn University
organization
publishing date
type
Thesis
publication status
published
subject
keywords
Competition, Consumer Choice, Motor vehicle inspection market
pages
109 pages
publisher
Lund University
defense location
Holger Crafoord Centre EC3:211
defense date
2018-09-27 14:15:00
ISSN
0460-0029
ISBN
978-91-7753-768-7
978-91-7753-767-0
language
English
LU publication?
yes
id
01b5c94f-c9e9-42ed-9412-89cf78affaa0
date added to LUP
2018-08-27 22:35:36
date last changed
2018-11-21 21:41:14
@phdthesis{01b5c94f-c9e9-42ed-9412-89cf78affaa0,
  abstract     = {This thesis makes a contribution to the areas of deregulation, competition and consumer choice. It consists of three self-contained papers. All the research questions are examined in the context of the Swedish motor vehicle inspection market.<br/><br/>The first paper, Competition Makes Inspectors More Lenient: Evidence from the Motor Vehicle Inspection Market, investigates whether increased competition motivates monitoring firms to relax the standards of the inspection to their customers. We hypothesized that the fear of loosing customers to competitors may incentivize firms to provide a biased inspection services. We employed fixed effects and fixed effects 2SLS analyses to identify the relationship between competition and the probability of passing mandatory car inspection. The results show that firms become more lenient to their customers when they face increased competition from their rivals.<br/><br/>The second paper, Opening Hours and Competition: Evidence from the Motor Vehicle Inspection Market, examines the effect of competition on an inspection firm's incentive to provide longer opening hours. This paper uses a unique station-level panel dataset and addresses the potential endogeneity of market entry decisions using 2SLS analyses. I find that increased competition between providers leads to expanded service opening hours.<br/><br/>The third paper, Deregulation, Choice and Competition in the Motor Vehicle Inspection Market, estimates a model of demand for car inspection services to investigate car owners' station choice behavior and its implications for competition. The paper further evaluates the effect on consumer welfare of removing the state monopoly on inspection services. The results indicate that distance is an important determinant of station choice. I also find that consumers respond to price, opening hours and station size. The improvement in spatial accessibility following the deregulation increased the welfare to the average consumer by around SEK 100.},
  author       = {Habte, Osmis Areda},
  isbn         = {978-91-7753-768-7},
  issn         = {0460-0029},
  language     = {eng},
  publisher    = {Lund University},
  school       = {Lund University},
  title        = {Essays on competition and consumer choice},
  url          = {https://lup.lub.lu.se/search/files/50246449/FinalThesis_Osmis_Mediatryck.pdf},
  year         = {2018},
}