The impact of the Massachusetts 2012 right to repair law on small, independent auto repair shops

ABSTRACT

In 2012, the State of Massachusetts enacted a law known as the ‘Right to Repair’ requiring automakers to share vital vehicle information and data with consumers and small auto repair shops for maintenance and repair purposes. This paper assesses the impact of this law on the number and percentage of small repair shops in the state. The results of a synthetic control and a difference-in-differences analysis show that the law led to increases in the number and market share of small auto repair shops.

KEYWORDS:

• Right to repair
• synthetic control
• difference-in-differences
• Massachusetts
• auto repair

JEL CLASSIFICATION:

• A10
• L11
• L15
• O30

Disclosure statement

No potential conflict of interest was reported by the author.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

¹ Bill H.4362, An Act Protecting Motor Vehicle Owners and Small Businesses in Repairing Motor Vehicles,

(accessed on 5 January 2021 at: https://malegislature.gov/Bills/187/H4362).

² Consumer Technology Association 2018 Corporate Report, available at: https://lsc-pagepro.mydigitalpublication.com/publication/?m=54798&i=495372&view=contentsBrowser.

³ See: https://www.repair.org/

⁴ For a comprehensive view of the legal aspects of ‘Right to Repair’ laws, see Grinvald and Tur-Sinai (2019).

⁵ The twenty states are: California, Georgia, Hawaii, Illinois, Indiana, Massachusetts, Minnesota, Missouri, Montana, North Dakota, Nevada, New Hampshire, New Jersey, New York, Oregon, South Dakota, Vermont, Virginia, Washington, and West Virginia (as noted in Grinvald and Tur-Sinai 2019).

⁶ CBP data are available at: https://www.census.gov/programs-surveys/cbp/data/datasets.html.

⁷ The CBP grouped industries using the SIC code system until 1998 when the NAICS system was employed. The NAICS 811,111 crosswalk denotes the SIC-equivalent code as 7538 (see: https://www.naics.com/code-search/?naicstrms=811111).

⁸ As developed by Abadie and Gardeazabal (2003); Abadie, Diamond, and Hainmueller (2010) and (2015).

⁹ The standardized p-values show the proportion of the placebo effects that are as large as that of Massachusetts. They are standardized by the RMPSE from the pre-treatment estimations.

¹⁰ The number of small shops does not follow a normal distribution. Tests for the percentage of small shops strongly support the assumption of a normal distribution.

¹¹ The inclusion of quadratic trends produced similar results for the estimate of ${\beta }_3$.

¹² Regression (4) also includes state-specific trends.

¹³ See Pischke (2005, 7).

¹⁴ As a robustness test of the differences-in-differences model, a triple difference-in-differences regression was estimated using data for the Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance industry (NAICS 811,310), as a comparison industry that was not subject to the 2012 RTR law. The results produced an expected positive coefficient to the triple interaction variable, but it failed to achieve statistical significance. (Thanks are due to a referee for suggesting this robustness test.)

¹⁵ See: 'Massachusetts Question 1, “Right to Repair Law” Vehicle Data Access Requirement Initiative (2020),’ available at: https://ballotpedia.org/Massachusetts_Question_1,_%22Right_to_Repair_Law%22_Vehicle_Data_Access_Requirement_Initiative_(2020).