Publication Type
Journal Article
Version
publishedVersion
Publication Date
6-2004
Abstract
This paper studies expectations formation and forecasting of vehicle demand in Singapore under the vehicle quota system. Under the system, a car buyer must first bid for a vehicle license in monthly auctions in order to purchase a new car. We construct an econometric model to test the hypothesis that past bid distributions of the license auctions contain information that car buyers can use to update their expectations about the intensity of market demand, forecast license premiums and formulate their bidding strategies in future auctions. Our empirical analysis indicates that past bid distributions have a good degree of predictive power for the vehicle license premiums.
Keywords
Quota licenses, Vehicle demand, Learning, Expectations formation, Singapore
Discipline
Asian Studies | Behavioral Economics | Transportation
Research Areas
Applied Microeconomics
Publication
Transportation Research Part A: Policy and Practice
Volume
38
Issue
5
First Page
367
Last Page
381
ISSN
0965-8564
Identifier
10.1016/j.tra.2003.12.002
Publisher
Elsevier
Citation
CHU, Sing-Fat; KOH, Winston T. H.; and TSE, Yiu Kuen.
Expectations Formation and Forecasting of Vehicle Demand: An Empirical Study of the Vehicle Quota Auctions in Singapore. (2004). Transportation Research Part A: Policy and Practice. 38, (5), 367-381.
Available at: https://ink.library.smu.edu.sg/soe_research/427
Copyright Owner and License
Publisher
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1016/j.tra.2003.12.002