Variety, price and quality in the South African automotive industry (2000-2009)

Includes abstract.Includes bibliographical references (leaves 50-52).This paper will investigate whether the predictions of the Krugman [1979] monopolistic competition model, the Melitz [2003] model and models of vertical product differentiation hold true for the developments in the South African automotive industry for the period 2000 to 2009. A new and highly disaggregated dataset of car prices and car sales is used, listing 2252 car varieties. It is found that while car varieties have increased on aggregate, trends in the growth of car varieties differ at a more disaggregated level