The price of owning a car: an analysis of auction quota premium in Singapore
Abstract:Faced with dilemmas parallel to countries besieged by road congestions and limited land resources, Singapore has chosen to adapt a Vehicle Quota System (VQS) whereby car owners are required to bid for a licence in an auction before their vehicles are allowed onto the road. In this study, the behaviour of VQS auction prices is examined using a structural time series approach. For outliers that are not observable from innovations, auxiliary residuals with dummy variables are used to supplement the analysis. In general, prices exhibit a fairly constant seasonal pattern. The inclusion of monthly VQS quotas released by the transport regulatory body and the national stock market index is not useful in explaining the observed price behaviour. Interestingly, a basic structural model with stochastic components seems to fit the data best.
Document Type: Research Article
Affiliations: 1: Institute for the Advancement of Business & Technology Saint Louis University Madrid Campus Avenida del Valle 34 28003 Madrid Spain 2: Department of Business Policy National University of Singapore 1 Business Link BIZ 1 Building Singapore 117592 Singapore
Publication date: 2004-04-01