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.
Buy single article
Instant access to the full article PDF.
Price excludes VAT (USA)
Tax calculation will be finalised during checkout.
Allen, R.C.: American exceptionalism as a problem in global history. J. Econ. Hist. 74(2), 309–350 (2014)
Caselli, F., Coleman, W.J.: Cross-country technology diffusion: the case of computers. Am. Econ. Rev. 91(2), 328–335 (2001)
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 Unpublished Ph.D. Dissertation, Vanderbilt University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)
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)
Foster, A.D., Rosenzweig, M.R.: Microeconomics of technology adoption. Annu. Rev. Econ. 2, 395–424 (2010)
Lutz, C.: The U.S. car colossus and the production of inequality. Am. Ethnol. 41(2), 232–245 (2014)
Madsen, J.B.: Trade barriers and the collapse of world trade during the great depression. South. Econ. J. 67(4), 848–868 (2001)
Sovacool, B.K.: Early modes of transport in the United States: lessons for modern energy policymakers. Policy Soc. 27(4), 411–427 (2009)
Staiger, D., Stock, J.H.: Instrumental variables regression with weak instruments. Econometrica 65(3), 557–586 (1997)
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
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). https://doi.org/10.1007/s12076-021-00273-6
- Technology adoption