Sealed v/s open bids for certificates of entitlement under the vehicle quota system in Singapore |
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Authors: | Singfat Chu |
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Institution: | (1) NUS Business School, National University of Singapore, Mochtar Riady Building, 15 Kent Ridge Drive, Singapore, 119245, Singapore |
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Abstract: | The Vehicle Quota System manages vehicle ownership in Singapore by making the procurement of a Certificate of Entitlement
(COE) a prerequisite for the registration of a new vehicle. The procurement is done during uniform price auctions of quotas
of COEs currently held on a twice-a-month schedule. The auction format which started out as sealed bids in May 1990 changed
to open bids in July 2001. This paper uses a regression model framework to investigate if this shift in auction format has
resulted in lower COE premium volatility and a better reflection of demand and supply forces. The empirical results are pertinent
to transport policy analysis. A suggestion in the form of incentives for early bids is also made to improve the efficiency
of the open bids auction. |
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