The Private Car License Plate Auction in Shanghai: Macro-effectiveness and Micro-mechanisms

摘要

For the last two decades, the private car license plate auction in Shanghai has gradually developed into a major regulatory measure to control the amount of private vehicles. In this paper, we attempt to evaluate the effectiveness of this policy and identify the challenges and problems faced by policymakers. By going through the historical development of this policy, we try to identify both the historical and the current objective of such a policy. We analyze the effectiveness of this policy from two perspectives. From the macroscopic perspective, the policy has been rather effective. According to our estimates, it reduces the annual growth of private car ownership by 30% since 2003. Our microscopic analysis of the auction market reveals that the government's attempt to suppress the plate price by continuously releasing more plates would only have short-term effect on price.