Performance analysis on private vehicle plate auction in Shanghai

Since 1986, the private vehicle plate auction (PVPA) in Shanghai has gradually turned into one of the effective regulation measures to eliminate total amount of private vehicles. Rooted from the public economics and governmental regulation theories, this paper presents three main reasons-irrational travel decision-making, excess car demand and social inequality on road right- why private vehicles need to be regulated by plate auction, and takes the PVPA as one of the vehicle quota regulation measures among marketing tools. After qualitatively analyzing the social benefit and cost of PVPA, this paper emphasizes on stakeholder analysis which demonstrates respective preference and choice between Shanghai and ecdemic plates of different groups. The performance of this policy relies on the difference between the increasing vehicles with ecdemic plates and the decrease of potential vehicle buyers who abandon purchase due to expensive auction price of Shanghai plates. Finally in a "with-and-without" policy scenario, a quantitative prediction has been conducted, revealing the fact that till 2008 around 830 thousand to 2.73 million vehicles have been totally eliminated by PVPA policy according to different elasticity of vehicle development to income.