Assessing Efficiency and Distributional Impacts of Transportation Policy

The project aims to examine Singapore’s transportation policy through a series of three studies: (i) vehicle ownership affected by the Vehicle Quota System (VQS) and supply of Certificate of Entitlement (COE), (ii) impact of ride-hailing platforms on transportation mode choice, vehicle ownership and COE prices, and (iii) how the COE price cycles may be amplified through monopsony power or collusion between vehicle dealers.

Building on existing scholarship on the dynamic equilibrium model, Asst Prof Lee hopes to achieve the following objectives through his project:

• Evaluate how the VQS affects different groups of car buyers and owners over time, especially considering price fluctuations in COE premiums.
• Understand how ride-hailing platforms have transformed who buys cars and how this impacts COE prices.
• Examine whether and how the current system of dealers bidding for COEs on behalf of car buyers could be improved.

Findings from the project can help policymakers enhance the fairness and efficiency of Singapore’s vehicle ownership policies. The research could also benefit other rapidly urbanising cities in Southeast Asia and beyond that face similar challenges in managing vehicle growth and traffic congestion.