From:Lawrence Katz 
To:"John Philip Rust" 
Subject: QJE: decision on your submission

Dear John:

I attach below reports from two knowledgeable referees on your submission (with Sungjin Cho), MS 12663, entitled

"The Flat Rental Puzzle"

for publication in the Quarterly Journal of Economics. One of the referees (R1) has provided only a brief report, but the other referee (R2) has produced a careful report. I have also read your paper
with great interest.

The referees and I think you are exploring a fascinating issue concerning why car rental rates typically do not vary with the age of the car or the previous mileage (odometer value). We appreciate
your thoughtful dynamic model of optimal replacement policy and careful attention to empirical issues concerning maintenance costs. Your conclusion that this company may be able to do better by
keeping rental cars longer and discounting the older cars certainly is intriguing. We look forward to the results of the company's experimenting with such a policy.

Nevertheless, as you can see from the attached reports, both referees have significant reservations concerning the suitability of your current paper for the QJE. R1 does not think there is much of a
puzzle. R2 just does not think there is a big enough stand-alone contribution of general interest here for the QJE. Although I enjoyed reading your paper and think this is truly first-rate work, we
need to make some tough editorial decisions given or severe space constraints and the nature of our readership. The referees have convinced me that your current study is not appropriate for the QJE.
Thus, we must reluctantly pass on your submission. I believe your current paper might be more appropriate for an outlet such as the Review of Economic Studies or a leading field journal in industrial
organization.

Thank you for giving us the opportunity to consider your engaging work. And I hope this rejection does not deter you or your co-author from considering the QJE as a possible outlet for future
research.

Sincerely yours,

Larry

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Lawrence Katz
Editor
qje_admin@gemini.econ.umd.edu
The Quarterly Journal of Economics