Contents lists available at ScienceDirect Transportation Research Part A journal homepage: www.elsevier.com/locate/tra The distributional effects of lotteries and auctions—License plate regulations in Guangzhou Shenhao Wang, Jinhua Zhao ⁎ Department of Urban Studies and Planning at the Massachusetts Institute of Technology, USA ARTICLE INFO Keywords: Automobile regulation Distributional effect Lottery Auction Mixed logit model ABSTRACT Lotteries and auctions are common ways of allocating public resources, but they have rarely been used simultaneously in urban transportation policies. This paper presents a unique policy ex- periment in Guangzhou, China, where lotteries and auctions are used in conjunction to allocate vehicle licenses. Guangzhou introduced vehicle license regulations to control the monthly quota of local automobile growth in 2012. To obtain a license, residents are required to choose between the lottery and auction method. Since the introduction of the regulations, there has been heated debates on the distributional effects of lotteries and auctions; however, the debates have not been grounded in empirical studies. We analyze the distributional effects of such mixed mode of re- source allocation in a positive manner based on individual behavioral choices. We conducted a survey in January 2016 (n = 1000 people * 12 months), and used mixed logit models to analyze how socio-economic status, including income and household automobile ownership, determined people’s choices among lottery, auction, and non-participation alternatives. We find that income increased participation, but did not influence non-car owners’ choices between lotteries and auctions, which contrasts with the common notion that lotteries benefit the poor. Additionally, the positive impact of car ownership on participation indicates a car-dependent trajectory for automobile growth. The significant socio-economic differentiators between lotteries and auctions were age, gender, and education. Proxies of mobility needs were insignificant overall. The pro- gram attributes had a much larger impact than all other variables—people were more likely to choose lotteries with higher winning rates and more participants and more likely to choose auctions with higher prices and more participants. We concluded that for those who participated, the choice between lotteries and auctions did not depend on their income or mobility needs but, rather, the probability of winning plates and the opportunity for speculation. 1. Introduction The transitional economy in China has significantly increased the number of individuals purchasing personal automobiles. Between 2000 and 2014, the total number of passenger car owners in China grew from 16.1 to 146 million (National Bureau of Statistics of China, 2015). This rapid growth has led to severe problems including air pollution, congestion, and energy consumption. Motor vehicles consume approximately 50% of the total oil consumed annually in China (Davis et al., 2008; Ma et al., 2012). To mitigate this unprecedented growth, Chinese local governments, including those of Beijing, Shanghai, Guangzhou, and four other major cities have implemented a series of license plate regulations. Beijing and Shanghai allocate car license plates by lottery and auction, respectively. In 2012, the Guangzhou government implemented license plate regulation characterized by its mixed allocation http://dx.doi.org/10.1016/j.tra.2017.10.011 Received 11 April 2017; Received in revised form 26 August 2017; Accepted 16 October 2017 ⁎ Corresponding author at: 77 Massachusetts Ave, 7-523, Cambridge, MA 02139, USA. E-mail addresses: shenhao@mit.edu (S. Wang), jinhua@mit.edu (J. Zhao). Transportation Research Part A 106 (2017) 473–483 Available online 07 November 2017 0965-8564/ © 2017 Elsevier Ltd. All rights reserved. MARK