Learning and Forgetting: The Dynamics of Aircraft Production

Working Paper No. 7127 This paper introduces a new cost dataset for a commercial aircraft firm and uses this data to analyze the dynamics of learning in commercial aircraft production. This dataset is found to be inconsistent with the simple learning hypothesis, and particularly the prediction that...

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Bibliographic Details
Published inNBER Working Paper Series p. 7127
Main Author C Lanier Benkard
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.05.1999
Subjects
Antitrust
Chemical spills
Commercial aircraft
Competition
Costs
Economic theory
Human capital
Hypotheses
Learning curves
Nuclear power plants
Productivity
Semiconductors
Shipbuilding
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Summary:Working Paper No. 7127 This paper introduces a new cost dataset for a commercial aircraft firm and uses this data to analyze the dynamics of learning in commercial aircraft production. This dataset is found to be inconsistent with the simple learning hypothesis, and particularly the prediction that a firm's unit cost must decline with its cumulative production. Instead, strong support is found for the hypothesis of organizational forgetting, a more general learning model where unit costs are similarly dependent on a firm's past production experience, but where that experience depreciates over time. Additionally, it is found that some, but not all, of a firm's production experience transfers from one generation of an aircraft to the next. This evidence adds to our understanding of productivity in industries with learning and thus has implications to many fields of economics.
ISSN:0898-2937
DOI:10.3386/w7127