Singapore introduced a vehicle quota system (VQS) in 1990 as part of its overall policy to control urban congestion. While the VQS has reduced the annual growth rate of the vehicle population to about 3%, it has created uncertainty in the cost of vehicle ownership due to the fluctuations in license prices. The paper discusses three issues relating to the optimal design of a VQS: license transferability, subcategorization and the choice of an auction format. Our analysis shows that license transferability is not unambiguously desirable, sub-categorization is highly regressive, and an open auction format results in less aggressive bidding and lower license prices.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Singapore Management University, School of Economics in its series Working Papers with number
03-2004.
Length: 34 pages Date of creation: Dec 2003 Date of revision: Publication status: Published in SMU Economics and Statistics Working Paper Series Handle: RePEc:siu:wpaper:03-2004
Find related papers by JEL classification: D44 - Microeconomics - - Market Structure and Pricing - - - Auctions D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing R48 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: