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The rising cost of weapon systems has been a serious concern to defense policymakers. It has been unclear, however, whether costs are rising faster or slower than the quality of the equipment. This Note develops a methodology for estimating the relationship between the cost of tactical aircraft and military quality. The authors apply the methodology to aircraft produced since 1950. Their analysis suggests that most of the cost growth derives from the increase in aircraft quality that has occurred over time. Furthermore, the cost increase has been reduced by improvements in the technology of aircraft production.
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