Skip to main content

Early twentieth century American exceptionalism on wheels: the role of rapid automobile adoption in economic development


We investigate the contribution of automobile adoption to state-level real income in the United States using hand-collected historical data of the early twentieth century when the adoption was remarkably rapid. To achieve identification, we construct a Bartik-type instrumental variable for automobile adoption. We find an elasticity of income with respect to automobile adoption between 0.5 and 1. Furthermore, we reveal that the elasticity is significantly larger in high-income and automobile producing states.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3


  • Allen, R.C.: American exceptionalism as a problem in global history. J. Econ. Hist. 74(2), 309–350 (2014)

    Article  Google Scholar 

  • Caselli, F., Coleman, W.J.: Cross-country technology diffusion: the case of computers. Am. Econ. Rev. 91(2), 328–335 (2001)

    Article  Google Scholar 

  • Cheng, D. (2018). Essays on the role of durables and financial frictions in business cycles and international trade. Unpublished Ph.D. Dissertation, Vanderbilt University

  • Cheng, D., Crucini, M.J., Oh, H., Yilmazkuday, H.: Early 20th century American exceptionalism: production, trade and diffusion of the automobile. NBER Working Paper No. 26121 (2019).

  • Comin, D.A., Hobijn, B.: Cross-country technology adoption: making the theories face the facts. J. Monet. Econ. 51(1), 39–83 (2004)

    Article  Google Scholar 

  • Fernandez-Cornejo, J., Hendricks, C., Mishra, A.: Technology adoption and off-farm household income: the case of herbicide-tolerant soybeans. J. Agric. Appl. Econ. 37(3), 549–563 (2005)

    Article  Google Scholar 

  • Foster, A.D., Rosenzweig, M.R.: Microeconomics of technology adoption. Annu. Rev. Econ. 2, 395–424 (2010)

    Article  Google Scholar 

  • Lutz, C.: The U.S. car colossus and the production of inequality. Am. Ethnol. 41(2), 232–245 (2014)

    Article  Google Scholar 

  • Madsen, J.B.: Trade barriers and the collapse of world trade during the great depression. South. Econ. J. 67(4), 848–868 (2001)

    Google Scholar 

  • Sovacool, B.K.: Early modes of transport in the United States: lessons for modern energy policymakers. Policy Soc. 27(4), 411–427 (2009)

    Article  Google Scholar 

  • Staiger, D., Stock, J.H.: Instrumental variables regression with weak instruments. Econometrica 65(3), 557–586 (1997)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Dong Cheng.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Cheng, D., Trebino, A. Early twentieth century American exceptionalism on wheels: the role of rapid automobile adoption in economic development. Lett Spat Resour Sci 14, 211–221 (2021).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


  • Automobile
  • Technology adoption
  • Income

JEL Classification

  • N72
  • O33