Øystein Daljord’s scientific contributions

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Publications (3)

The Black Market for Beijing License Plates
  • Article

January 2022

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6 Reads

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1 Citation

SSRN Electronic Journal

Guillaume Pouliot

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Øystein Daljord

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Figure 1 displays the average car prices in Beijing, Tianjin, and Shijiazhuang on a monthly level before and after the introduction of the Beijing lottery. Tianjin is the fourth largest city in China and is about 130 kilometers away from Beijing. With a GDP of about two-thirds of Beijing's GDP, Tianjin experienced the fastest economic growth of the major Chinese cities in the period covered by the data. Shijiazhuang, 270 kilometers away from Beijing, is the capital and the largest city of North China's Hebei Province. Although it has about a quarter of the GDP of Beijing and about a tenth of the population, Shijiazhuang has a similar pre-trend to Tianjin and Beijing. Shijiazhuang had not introduced rationing by 2016, while Tianjin introduced a hybrid auction/lottery format in January 2014. The average price in Beijing is seen to increase by 24% following the introduction of the lottery. The average prices in Tianjin and Shijiazhuang increased by about 3% in the same period. Assuming common trends across the cities, we get a difference-in-differences estimate of the effect of the rationing on the average car prices of about 21%. See Section C for the corresponding difference-in-differences regressions.
Figure 1: Placebo costs as a function of d. The curves represent the mean, standard deviation, and the quantiles of 500 simulated values of OT d ( ˜ P pre,npre , ˜ P pre,npost ) for each value of d in Beijing. The vertical line at d = 25, 000 is the smallest bandwidth for which the placebo cost is less than 0.05%.
Figure 2: Distribution of price changes between 2010 and 2011. Nearly all of the density is near 0, suggesting that prices did not change much between 2010 and 2011.
Figure 3: Distribution of Beijing car prices in 2010 (pre-lottery) and new car prices in 2011 (post-lottery). There is little change in the car prices before the lottery and the car prices of new models after the lottery, irrespective of the number of cars sold at each price. The parameters of the superimposed Gaussian curves are the mean and variance of log MSRP for the respective set of data.
Figure 4: Histograms of Beijing car sales in 2010 (pre-lottery) and 2011 (post-lottery). Unlike Figure 3, this plot considers the number of cars sold at each MSRP value.

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The Black Market for Beijing License Plates
  • Preprint
  • File available

May 2021

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819 Reads

Øystein Daljord

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Guillaume Pouliot

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Black markets can reduce the effects of distortionary regulations by reallocating scarce resources toward consumers who value them most. The illegal nature of black markets, however, creates transaction costs that reduce the gains from trade. We take a partial identification approach to infer gains from trade and transaction costs in the black market for Beijing car license plates, which emerged following their recent rationing. We find that at least 11% of emitted license plates are illegally traded. The estimated transaction costs suggest severe market frictions: between 61% and 82% of the realized gains from trade are lost to transaction costs.

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Citations (1)

... Three different rationing mechanisms are used to allocate the quota: a lottery (Beijing), an auction (Shanghai), or a hybrid of both auction and lottery (all other cities with a quota system). Daljord et al. (2020) suggested that a black market may exist in some cities with a random quota rationing mechanism, and some consumers still have to pay for quotas in such cities. For example, the authors used the data for Beijing to estimate the lower bound of the black market size and found that at least 11% of the quota of license plates is illegally traded. ...

Reference:

Welfare analysis of the subsidies in the Chinese electric vehicle industry
The Black Market for Beijing License Plates
  • Citing Article

  • January 2019

SSRN Electronic Journal

Øystein Daljord

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Guillaume Pouliot

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