Defense Industry Profits in Perspective,
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
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Defense industry profitability has been a topic of high interest in recent months. For example, Washington Post articles published periodically since last Spring have put forth the opinion that Defense industry profits are quite high with respect to other areas of American business. These articles speak of record profits 1 and profits that are rarely matched in commercial business. This paper casts serious doubt about the validity of such statements. This paper compares the defense industry with non-durable goods industries. This was done so as to have statistically independent values for comparison. The object of the study is to compare different segments of American business to see if one is more profitable than another. The total period of time covered is from 1978 to estimates of 1985. Table 1 lists the companies included in the defense industry Table 2 lists the companies included in each of the other industries.
- Economics and Cost Analysis