Expectations Formation and Forecasting of Vehicle Demand: An Empirical Study of the Vehicle Quota Auctions in Singapore
AbstractThis 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.
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Bibliographic InfoPaper provided by Singapore Management University, School of Economics in its series Working Papers with number 02-2004.
Length: 24 pages
Date of creation: Dec 2003
Date of revision:
Publication status: Published in SMU Economics and Statistics Working Paper Series
Other versions of this item:
- Chu, Sing-Fat & Koh, Winston T. H. & Tse, Yiu Kuen, 2004. "Expectations formation and forecasting of vehicle demand: an empirical study of the vehicle quota auctions in Singapore," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(5), pages 367-381, June.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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