Smithian Market: Hong Kong License Plates

An interesting market and an expected result due to the recession. This from The International Herald Tribune:

“The clearest sign yet was Saturday, when a monthly auction of personalized license plates raised a mere 8.7 million Hong Kong dollars, or $1.1 million, for a government charity fund. That may sound like a lot of money, but remember, Hong Kong is a city so obsessed with cars that many owners have domestic helpers who wash them every day. During the same month last year, when times were better, the auction fetched 33.7 million dollars.

At Saturday’s auction, amid the somber, cavernous gloom of Room 601 in Hong Kong’s convention center, the highest price paid for a single plate was 1.7 million dollars for the lucky number “2318.” Just a year ago, an electronics entrepreneur paid a record, 16.5 million dollars for “18,” a distant memory of the boom days before the recession.

At an auction in January, plates like BACK OFF and THANK YOU went for less than 20,000 dollars each. MY CAR, which had been expected to be the star of that show, went under the hammer for a bargain-basement 40,000.”

I have always thought that license plates were a waste of money but I was merely talking about my local state fee to get it made. This too me seems like a smart idea on the government side to raise revenue. My question, how long do you have that right to that plate and can you pass it on? This would, of course, raise the price but also only be a one shot revenue raiser until other words like “lol” became more popular. Due to the recession, people are not spending as much as they use to. This makes sense economically, but it would be interesting to map if this is actual income growth slowing or pessimism/expectations.

The rest is here.


Published in: on February 19, 2009 at 12:53 pm  Leave a Comment  
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