Publication Type
Working Paper
Version
publishedVersion
Publication Date
6-2004
Abstract
This paper studies the 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 the 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 license premiums.
Keywords
Quota licenses, Vehicle demand, Learning, Expectations formation, Singapore
Discipline
Asian Studies | Behavioral Economics | Econometrics | Transportation
Research Areas
Econometrics; Applied Microeconomics
First Page
1
Last Page
23
Publisher
SMU Economics and Statistics Working Paper Series, No. 02-2004
City or Country
Singapore
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). 1-23.
Available at: https://ink.library.smu.edu.sg/soe_research/778
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Included in
Asian Studies Commons, Behavioral Economics Commons, Econometrics Commons, Transportation Commons
Comments
Published in Transportation Research Part A: Policy and Practice, 2004, https://doi.org/10.1016/j.tra.2003.12.002