Willingness to pay for a message: personalized licence plate auctions in Hong Kong

ABSTRACT

We use a large sample of winning price data hand-collected from Hong Kong’s personalized licence plate auctions held from 2006 to 2018 to estimate hedonic price regressions that document the willingness to pay (WTP) for a message. A clear and concise message of emotion or humour tends to attract a high WTP. The estimated WTP effects of vanity, positive outlook and superstition are relatively small. These findings affirm that advertising messages should be clear and concise, preferably appealing to consumers’ emotion and humour.

KEYWORDS:

• Willingness to pay
• advertising messages
• personalized licence plates
• ascending price auctions
• Hong Kong

JEL CLASSIFICATION:

• D1
• D44
• D91

Highlights

• We study Hong Kong’s personalized license plate (PLP) auctions.

• We estimate the willingness to pay (WTP) of a PLP’s message.

• A clear and concise message of emotion or humor tends to attract a high WTP.

• The WTP effects of vanity, positive outlook and superstition are small.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

¹ We use clustered robust standard errors to conservatively determine the coefficient estimates’ statistical significance. Had we redone our regressions by explicitly specifying the functional form of the likely heteroskedasticity present in our auction price data, our inferences presented herein would remain valid.