Home » Posts tagged 'secondary markets'
Tag Archives: secondary markets
Price Determinants and Depreciation of Used Cars Post-COVID-19
by Ayaan Sundeep Patel
Abstract
Throughout the COVID-19 pandemic, the price of used cars has fluctuated greatly due to
numerous factors. Inflation and supply chain issues have been at the forefront of the news and
have affected not only cars but most consumer goods. While the majority of society has
seemingly progressed past COVID-19, its effects still linger in the used car market, as prices rose
4.6% from January 2023 to February 2023. Therefore, in an effort to study this phenomenon, I
scraped data from autotrader.co.uk on February 23, 2023. This study aims to understand the
effect of various factors, including mileage, age, and engine size, on various classes of used cars.
The five classes being studied are compact cars, luxury sports sedans, luxury mid-size sedans,
luxury full-size sedans, and luxury SUVs. A log-linear model is used to model the price
determinants of the used cars. A linear model is incorporated to model the depreciation rate of
the cars in the dataset. Lastly, this model is used to predict the three-year depreciation rate for
each car model, which is then compared to the pre-COVID-19 three-year depreciation rate to see
the inflated prices in the UK used car market.
Michelle Connolly, Ph.D., Faculty Advisor
Andrea Lanteri, Ph.D., Faculty Advisor
Hedonic Pricing in the Sneaker Resale Market
By Kevin Ma and Matthew Treiber
This paper explores the secondary resale market for high-end and limited-edition sneakers, specifically analyzing the determinants that affect what value sneakers trade for in the secondary market. While it is common knowledge that the sneaker resale market is a thriving and active secondary market, there is little to no empirical research about what exactly causes such sneakers to sell for exorbitant prices in the resale market. The study utilizes a hedonic pricing approach to investigate the determinants of sneaker resale price. We use a dataset of sneaker resale transactions from the online marketplace StockX between the years of 2016 and 2020 as the basis for our research. After analyzing the results, we have determined that the amount of “hype” that surrounds a sneaker as well as supply scarcity are statistically significant factors when determining the resale price premium a particular sneaker commands in the secondary market. This work adds to the sparse literature on the sneaker resale industry and brings an econometrics-approach to determining the price a given pair of sneakers commands in the resale market.
View Data (Email for Access)
Advisors: Professor Kyle Jurado, Professor Michelle Connolly, Professor Grace Kim| JEL Codes: C2, C20, J19
