Title

Expectations Formation and Forecasting of Vehicle Demand: An Empirical Study of the Vehicle Quota Auctions in Singapore

Publication Type

Journal Article

Publication Date

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

Discipline

Asian Studies | 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

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://dx.doi.org/10.1016/j.tra.2003.12.002

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