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Proquest Dissertations INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. UMI films the text directly from the original or copy submitted. Thus, some thesis aixl dissertation copies are in typewriter face, while others may be from any type of computer printer. The quality of this reproduction is dependent upon the quality of the copy submitted. Broken or indistinct print colored or poor quality illustrations and photographs, print bleedthrough, substandard margins, arxl improper alignment can adversely affect reproduction. In the unlikely event that the author did not send UMI a complete manuscript and there are missing pages, these will be noted. Also, if unauthorized copyright material had to be removed, a note will indicate the deletion. Oversize materials (e.g., maps, drawings, charts) are reproduced by sectioning the original, beginning at the upper left-hand comer and continuing from left to right in equal sections with small overlaps. Photographs included in the original manuscript have been reproduced xerographically in this copy. Higher quality 6” x 9" black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. Bell & Howell Information and Leaming 300 North Zeeb Road, Ann Artwr, Ml 48106-1346 USA 800-521-0600 UMI AN UNSUNG HERO: THE FARM TRACTOR'S CONTRIBUTION TO TWENTIETH-CENTURY UNITED STATES ECONOMIC GROWTH DISSERTAHON Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By William J White m , M.S.M The Ohio State University 2000 Dissertation Committee: Approved by Professor Richard Steckel, Adviser Professor Ben Baack _ Adviser Professor Howard Marvel Department of Economics UMI Number 9983008 UMI UMI Microform9983008 Copyright 2000 by Bell & Howell Information and Leaming Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. Bell & Howell Information and Leaming Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 ABSTRACT In his successful attack on the 'axiom of indispensability*, Robert Fogel demonstrated that the railroads made only a modest contribution to the growth of nineteenth-century income in the United States. In his conclusions, he offered an opinion that growth resulted from countless small innovations and that no single new technology was important enough to study in isolation. My dissertation challenges Fogel's conclusion by presenting evidence of a 20ih-century 'hero' - the farm tractor. By tripling labor productivity and replacing more than 24MM work animals, the tractor dramatically reduced total factor inputs to agriculture, freeing up resources for use in the rapidly- growing manufacturing sector. Through the use o f a counterfactual analysis, I find the direct social savings to be in excess of 8% of 1954 GNP, more than double Fogel's highest estimate for railroads in 1890. When indirect benefits are added, such as the use of tractors to apply yield-increasing agricultural chemicals, its contribution to the growth of the economy in this century is quite significant. Even with the large social benefits of mechanization, the new technology was adopted rather slowly. Over the years, social scientists have attributed this delayed response to ignorance, irrationality, and most recently, to several types o f market failure. Threshold models have been used extensively in the literature to illustrate the technology choices u faced by the Armer My work challenges the market Ailure hypotheses. Using a comprehensive production and quality database, I develop a hedonic index of tractor prices, which shows that quality-adjusted prices fell continuously from 1918 until about 1940, then stabilized at half of their initial level as the technology matured. Given this dynamic element, properly constructed threshold models show the pace and pattern of diffusion to be a rational market response to changing relative prices. As quality and features improved, and as cumulative production experience allowed manufacturers to reduce production costs, the tractor became a better replacement for animal power on all types and sizes of farms. The social benefits from this unsung hero then spread across the country, lowering food prices and freeing up labor for manufacturing and services. Ill DEDICATION This work is dedicated to Maria; my wife, the love o f my life, and my best friend. Without her constant support and untiring efforts, I would never have had the opportunity to pursue my dream and complete this research effort. Throughout our time together, we have tried to model mutual support and coUeagueship. I only hope that in the near future, I can pay back her investment in me by helping her to achieve an equally valuable goal. ACKNOWLEDGMENTS I wish to thank my adviser, Richard Steckel, for valuable guidance, support, and suggestions in preparation of this manuscript In addition, the example he set as a dedicated scholar and teacher continually inspired me to persevere. I am also grateful for thoughtful reflections and moral support from John Murray, Lee Craig, and Peter Kower, whose kind words and gentle nudges often helped me find direction and motivation. I must also thank Howard Marvel, Ben Baack, and James Peck for their critical evaluation and re-direction of early drafts of the several papers which comprise this thesis. Additional helpful comments were received from Sally Clarke, Craig Heinicke, Matthew Martin, Peter Mayer, Joel Mokyr, and Peter Howitt, as well as participants in seminars at The Ohio State University, Northwestern University, and the Ohio Association o f Economists and Political Scientists. VITA June 30, 1959 ...................................... Born - Portsmouth, Ohio May, 1981 ...........................................B.S. Chemical Engineering, B S. Chemistry major, Purdue University June, 1983 ............................................M.S. Management, Massachusetts Institute of Technology 1983 - 1984 ......................................... Materials Specialist, General Electric Chemical Products Plant, Cleveland, Ohio 1984 - 1995 ......................................... Manufacturing Manager, Procter & Gamble Industrial Chemicals Division and Skin Cleansing Category, Cincinnati, Ohio 1996 - 1999 .........................................Graduate Teaching and Research Assistant, Economics, The Ohio State University 1999 - 2000 ......................................... Visiting Lecturer, Department of Economics, Northwestern University FIELDS OF STUDY Major Field; Economics Areas of Specialization: Economic History, Industrial Organization VI TABLE OF CONTENTS Abstract.................................................................................................................................... ü Dedication ............................................................................................................................... iv Acknowledgments .................................................................................................................. v V ita.......................................................................................................................................... vi List of Tables .......................................................................................................................... ix List of Figures ......................................................................................................................... x Introduction ............................................................................................................................. 1 Chapters; 1. Background ................................................................................................................. 9 2. History and Technology of the Tractor .................................................................... 14 3. The Tractor as an Engine for Growth ...................................................................... 25 Agriculture in 1910 ............................................................................................... 28 Agriculture in 1954 ............................................................................................... 31 The Counterfactual Proposition .......................................................................... 37 Model of the Physical Inputs to Farming ............................................................ 39 The Counterfactual D ata ...................................................................................... 44 Social Savings Calculations .................................................................................. 53 Discussion .............................................................................................................. 56 Conclusions ........................................................................................................... 59 VII 4. The Duration and Timing of Technological Change - Quality Adjusted Tractor Prices, 1918 - 1955 ................................................................................................ 62 Background ............................................................................................................ 63 Quality Attributes and Technological Development of Tractors ...................... 67 Data Sources and Collection ...............................................................................
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