Research Article
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What is happening to used car prices in Turkey? Evidence from Hedonic Price Model (HPM)

Year 2021, Issue: 46, 225 - 240, 20.10.2021
https://doi.org/10.52642/susbed.909818

Abstract

With the Covid 19 pandemic, many sectors on a global scale have been affected by this situation. In Turkey, automobile industry faced with high price volatilities and used car prices increased drastically, indeed, they surged brand new ones. Thus, the purpose of this study is examining the used car prices on two different time May 2020 and Mar 2021 by Hedonic Price Model (HPM). For this purpose, cross-sectional linear regression method is applied to price and hedonic characteristics of Renault Megane and Volkswagen Passat as two of top 10 most sold car model in 2020 in Turkey. Equipment, year, milage, transmission, fuel, color and location of the seller variables were applied to determine the effect on the price of the used car. On both dates 2018-2019-2020 model year cars are used for comparison purposes. According to test results the equipment, year, milage, transmission and fuel variables and constant term for each model are statistically significant. The color variables and variables represent the location of the seller are less successful in explanation.

References

  • Albayrak, A. S. (2008). To the Least Squares Technique in the Presence. Afyon Kocatepe Üniversitesi, İ.İ.B.F. Dergisi, 10(2), 111–134.
  • Atkinson, S. E., & Halvorsen, R. (1984). A new hedonic technique for estimating attribute demand: an application to the demand for automobile fuel efficiency. The Review of Economics and Statistics, 417-426.
  • Automotive Distributor Association (2020), Automotive Distributors Association Market Retail Sales. Retrieved from http://www.odd.org.tr/web_2837_1/sortial.aspx?linkpos=1&target=categorial1&type=36&primary_id=&detail=single&sp_table=&sp_primary=&sp_fields=&sp_language=&sp_table_extra=&extracriteria=&language_id=1&search_fields=&search_values=
  • Barrero, J. M., Bloom, N., & Davis, S. J. (2020). Covid-19 is also a reallocation shock (No. w27137). National Bureau of Economic Research.
  • Berry, S., Kortum, S., & Pakes, A. (1996). Environmental change and hedonic cost functions for automobiles. Proceedings of the National Academy of Sciences, 93(23), 12731-12738.
  • Bexter, R. (2020). Used car prices surge during COVID-19 pandemic as drivers move away from transport and new models. Retrieved from 9news website: https://www.9news.com.au/national/used-car-prices-queensland-increasing-public-transport-abandoned-new-cars-slump/d7e3e5c8-f749-43f2-bb59-a31e7f071e06
  • Bimbo, F., Bonanno, A., Liu, X., & Viscecchia, R. (2016). Hedonic analysis of the price of UHT-treated milk in Italy. Journal of dairy science, 99(2), 1095-1102. Branch, B. (1977). A tax loss trading rule. the Journal of Business, 50(2), 198-207.
  • Cavallo, C., Caracciolo, F., Cicia, G., & Del Giudice, T. (2018). Extra‐virgin olive oil: are consumers
  • Dargay, J. M. (2001). The effect of income on car ownership: evidence of asymmetry. Transportation Research Part A: Policy and Practice, 35(9), 807-821.
  • de Oliveira Santos, G. E. (2016). Worldwide hedonic prices of subjective characteristics of hostels. Tourism Management, 52, 451-454.
  • Emmerling, J., & Qari, S. (2017). Car ownership and hedonic adaptation. Journal of Economic Psychology, 61, 29-38.
  • Erdem, C., & Şentürk, I. (2009). A hedonic analysis of used car prices in Turkey. International Journal of Economic Perspectives, 3(2), 141–149.
  • Friedman, M. (2007). Price theory. Transaction Publishers.
  • Gössling, S., Scott, D., & Hall, C. M. (2020). Pandemics, tourism and global change: a rapid assessment of COVID-19. Journal of Sustainable Tourism, 1-20.
  • Herath, S., & Maier, G. (2010). The hedonic price method in real estate and housing market research: a review of the literature.
  • Hill, R. J., & Syed, I. A. (2016). Hedonic price–rent ratios, user cost, and departures from equilibrium in the housing market. Regional Science and Urban Economics, 56, 60-72.
  • Hu, L., & Baldin, A. (2018). The country of origin effect: a hedonic price analysis of the Chinese wine market. British Food Journal.
  • Hülagü, T., Kızılkaya, E., Özbekler, A. G., & Tunar, P. (2016). A hedonic house price index for Turkey. Central Bank of the Republic of Turkey Working Papers, 16(03).
  • Ladd, G. W., & Suvannunt, V. (1976). A Model of Consumer Goods Characteristics. American Journal of Agricultural Economics, 58(3), 504–510. https://doi.org/10.2307/1239267
  • Lambin, J. J. (1970). Optimal allocation of competitive marketing efforts: an empirical study. The Journal of Business, 43(4), 468-484.
  • Lancaster, K. J. (1960). A New Approach to Consumer Theory. The Journal of Political Economy, 74(2), 132–157.
  • Lee, G., Cho, D., & Kim, K. (2016). The modifiable areal unit problem in hedonic house-price models. Urban Geography, 37(2), 223-245.
  • Lieske, S. N., van den Nouwelant, R., Han, J. H., & Pettit, C. (2021). A novel hedonic price modelling approach for estimating the impact of transportation infrastructure on property prices. Urban Studies, 58(1), 182-202.
  • Lorde, T., Jacob, J., & Weekes, Q. (2018). Price-setting behavior in a tourism sharing economy accommodation market: A hedonic price analysis of AirBnB hosts in the caribbean.
  • Lucas, R., & Stokey, N. (2011). Liquidity crises. Unpublished manuscript, University of Chicago.
  • Montgomery, D. C., Peck, E. A., & Vining, G. G. (2021). Introduction to linear regression analysis. John Wiley & Sons.
  • Morioka, T., Fujita, T., & Yoshida, N. (1996). Performance and shortcomings of typical environmental pollution control programs for automobile traffic in Kobe city and surrounding areas. Social cost evaluation of noise pollution by hedonic price method. Science of the total environment, 189, 99-105.
  • Motorlu Taşıtlar Vergisi Kanunu. (1963). 197 Sayılı Motorlu Taşıtlar Vergisi Kanunu. https://www.mevzuat.gov.tr/MevzuatMetin/1.5.197.pdf
  • Mulalic, I., & Rouwendal, J. (2015). The impact of fixed and variable cost on automobile demand: Evidence from Denmark. Economics of Transportation, 4(4), 227-240.
  • Özel Tüketim Vergisi Kanunu. (2002). 4760 Sayılı Özel Tüketim Vergisi Kanunu. Retrieved from https://www.mevzuat.gov.tr/MevzuatMetin/1.5.4760.pdf
  • Park, S., Choi, G. J., & Ko, H. (2020). Information technology–based tracing strategy in response to COVID-19 in South Korea—privacy controversies. Jama.
  • Philkotse. (2019). philkotse.com. https://philkotse.com/market-news/market-analysis-downfall-in-world-car-sales-for-the-first-half-2019-5298
  • Cavallo, C., Caracciolo, F., Cicia, G., & Del Giudice, T. (2018). Extra‐virgin olive oil: are consumers provided with the sensory quality they want? A hedonic price model with sensory attributes. Journal of the Science of Food and Agriculture, 98(4), 1591-1598.
  • Ramya, N., & Ali, S. M. (2016). Factors affecting consumer buying behavior. International journal of applied research, 2(10), 76-80.
  • Rebelo, J., Lourenço-Gomes, L., Gonçalves, T., & Caldas, J. (2019). A hedonic price analysis for the Portuguese wine market: Does the distribution channel matter?. Journal of Applied Economics, 22(1), 40-59.
  • Reis, H. J., & Silva, J. S. (2006). Hedonic prices indexes for new passenger cars in Portugal (1997–2001). Economic Modelling, 23(6), 890-908. Reuters. (2020). Reuters. Retrieved from https://www.reuters.com/article/us-germany-economy-wages-idUSKBN1JM1AS
  • Rosen, S. (1974). Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy, 82, 34–55. https://doi.org/10.1086/260169
  • Statista. (2020). Average price (including tax) of passenger cars in the EU in 2015 and 2019, by country. Retrieved from https://www.statista.com/statistics/425095/eu-car-sales-average-prices-in-by-country/
  • Strateji ve Bütçe Başkanlığı. (2020a). Türkiye Cumhuriyeti Merkezi Yönetim Bütçesi Aylık Bütçe Gerçekleşmeleri. Retrieved from http://www.sbb.gov.tr/merkezi-yonetim-butcesi-aylik-gerceklesmeleri/
  • Strateji ve Bütçe Başkanlığı. (2020b). Türkiye Cumhuriyeti Vergi Gelirleri. https://www.sbb.gov.tr/vergi-gelirleri/
  • Szczesny, J. (2020). Car Sales Losing Momentum as COVID Cases Rise. Retrieved from The Detroit Bureau website: https://www.thedetroitbureau.com/2020/07/car-sales-losing-momentum-as-covid-cases-rise/
  • The World Bank. (2020). GDP per capita (current US$). Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?name_desc=false
  • Trading Economics. (2020). Trading Economics. Retrieved from https://tradingeconomics.com/country-list/gdp
  • Wang, X. Y., & Zhang, P. (2008). Disclosure and Insider Trading Profiteering Strategy- Case Study Using a Sample of Six Corporations in a Share Marketplace. Journal of Management Case Studies, 3.
  • World Health Organization. (2020). World Health Organization. Retrieved February 4, 2021, from https://www.who.int/news/item/27-04-2020-who-timeline---covid-19

Türkiye'de İkinci El Araç Fiyatlarına Ne Oluyor? Hedonik Fiyat Modeli (HPM) Üzerinden Bulgular

Year 2021, Issue: 46, 225 - 240, 20.10.2021
https://doi.org/10.52642/susbed.909818

Abstract

Covid 19 pandemisiyle birlikte küresel çapta pek çok sektör bu durumdan etkilenmiştir. Türkiye’de otomobil sektörü ise yüksek fiyat dalgalanmalarının yaşandığı ve ikinci el araç fiyatlarının önemli ölçüde yükseliş gösterdiği hatta sıfır araç fiyatlarının önüne geçtiği tespit edilmiştir. Bu sebeple bu çalışmanın amacı, Hedonic Fiyat Modeli (HPM) ile Mayıs 2020 ve Mart 2021 olmak üzere iki farklı zaman diliminde ikinci el araba fiyatlarını incelemektir. Bu amaçla, 2020 yılında Türkiye'de en çok satılan ilk 10 otomobil modelinden ikisi olan Renault Megane ve Volkswagen Passat'ın fiyatları ve hedonik özelliklerine kesitsel doğrusal regresyon yöntemi uygulanmıştır. İkinci el arabanın fiyatı üzerindeki etkiyi belirlemek için donanım, yıl, kilometre, şanzıman, yakıt, renk ve satıcının konumu değişkenleri kullanılmıştır. Karşılaştırma yapabilmek adına her iki tarihte de 2018-2019-2020 model yılı arabalar kullanılmıştır. Test sonuçlarına göre her bir model için donanım, yıl, kilometre, şanzıman, yakıt değişkenleri ve sabit terim istatistiksel olarak anlamlıdır. Renk değişkenleri ve satıcının konumunu gösteren değişkenler araç fiyatlarını açıklamada daha az başarılıdır.

References

  • Albayrak, A. S. (2008). To the Least Squares Technique in the Presence. Afyon Kocatepe Üniversitesi, İ.İ.B.F. Dergisi, 10(2), 111–134.
  • Atkinson, S. E., & Halvorsen, R. (1984). A new hedonic technique for estimating attribute demand: an application to the demand for automobile fuel efficiency. The Review of Economics and Statistics, 417-426.
  • Automotive Distributor Association (2020), Automotive Distributors Association Market Retail Sales. Retrieved from http://www.odd.org.tr/web_2837_1/sortial.aspx?linkpos=1&target=categorial1&type=36&primary_id=&detail=single&sp_table=&sp_primary=&sp_fields=&sp_language=&sp_table_extra=&extracriteria=&language_id=1&search_fields=&search_values=
  • Barrero, J. M., Bloom, N., & Davis, S. J. (2020). Covid-19 is also a reallocation shock (No. w27137). National Bureau of Economic Research.
  • Berry, S., Kortum, S., & Pakes, A. (1996). Environmental change and hedonic cost functions for automobiles. Proceedings of the National Academy of Sciences, 93(23), 12731-12738.
  • Bexter, R. (2020). Used car prices surge during COVID-19 pandemic as drivers move away from transport and new models. Retrieved from 9news website: https://www.9news.com.au/national/used-car-prices-queensland-increasing-public-transport-abandoned-new-cars-slump/d7e3e5c8-f749-43f2-bb59-a31e7f071e06
  • Bimbo, F., Bonanno, A., Liu, X., & Viscecchia, R. (2016). Hedonic analysis of the price of UHT-treated milk in Italy. Journal of dairy science, 99(2), 1095-1102. Branch, B. (1977). A tax loss trading rule. the Journal of Business, 50(2), 198-207.
  • Cavallo, C., Caracciolo, F., Cicia, G., & Del Giudice, T. (2018). Extra‐virgin olive oil: are consumers
  • Dargay, J. M. (2001). The effect of income on car ownership: evidence of asymmetry. Transportation Research Part A: Policy and Practice, 35(9), 807-821.
  • de Oliveira Santos, G. E. (2016). Worldwide hedonic prices of subjective characteristics of hostels. Tourism Management, 52, 451-454.
  • Emmerling, J., & Qari, S. (2017). Car ownership and hedonic adaptation. Journal of Economic Psychology, 61, 29-38.
  • Erdem, C., & Şentürk, I. (2009). A hedonic analysis of used car prices in Turkey. International Journal of Economic Perspectives, 3(2), 141–149.
  • Friedman, M. (2007). Price theory. Transaction Publishers.
  • Gössling, S., Scott, D., & Hall, C. M. (2020). Pandemics, tourism and global change: a rapid assessment of COVID-19. Journal of Sustainable Tourism, 1-20.
  • Herath, S., & Maier, G. (2010). The hedonic price method in real estate and housing market research: a review of the literature.
  • Hill, R. J., & Syed, I. A. (2016). Hedonic price–rent ratios, user cost, and departures from equilibrium in the housing market. Regional Science and Urban Economics, 56, 60-72.
  • Hu, L., & Baldin, A. (2018). The country of origin effect: a hedonic price analysis of the Chinese wine market. British Food Journal.
  • Hülagü, T., Kızılkaya, E., Özbekler, A. G., & Tunar, P. (2016). A hedonic house price index for Turkey. Central Bank of the Republic of Turkey Working Papers, 16(03).
  • Ladd, G. W., & Suvannunt, V. (1976). A Model of Consumer Goods Characteristics. American Journal of Agricultural Economics, 58(3), 504–510. https://doi.org/10.2307/1239267
  • Lambin, J. J. (1970). Optimal allocation of competitive marketing efforts: an empirical study. The Journal of Business, 43(4), 468-484.
  • Lancaster, K. J. (1960). A New Approach to Consumer Theory. The Journal of Political Economy, 74(2), 132–157.
  • Lee, G., Cho, D., & Kim, K. (2016). The modifiable areal unit problem in hedonic house-price models. Urban Geography, 37(2), 223-245.
  • Lieske, S. N., van den Nouwelant, R., Han, J. H., & Pettit, C. (2021). A novel hedonic price modelling approach for estimating the impact of transportation infrastructure on property prices. Urban Studies, 58(1), 182-202.
  • Lorde, T., Jacob, J., & Weekes, Q. (2018). Price-setting behavior in a tourism sharing economy accommodation market: A hedonic price analysis of AirBnB hosts in the caribbean.
  • Lucas, R., & Stokey, N. (2011). Liquidity crises. Unpublished manuscript, University of Chicago.
  • Montgomery, D. C., Peck, E. A., & Vining, G. G. (2021). Introduction to linear regression analysis. John Wiley & Sons.
  • Morioka, T., Fujita, T., & Yoshida, N. (1996). Performance and shortcomings of typical environmental pollution control programs for automobile traffic in Kobe city and surrounding areas. Social cost evaluation of noise pollution by hedonic price method. Science of the total environment, 189, 99-105.
  • Motorlu Taşıtlar Vergisi Kanunu. (1963). 197 Sayılı Motorlu Taşıtlar Vergisi Kanunu. https://www.mevzuat.gov.tr/MevzuatMetin/1.5.197.pdf
  • Mulalic, I., & Rouwendal, J. (2015). The impact of fixed and variable cost on automobile demand: Evidence from Denmark. Economics of Transportation, 4(4), 227-240.
  • Özel Tüketim Vergisi Kanunu. (2002). 4760 Sayılı Özel Tüketim Vergisi Kanunu. Retrieved from https://www.mevzuat.gov.tr/MevzuatMetin/1.5.4760.pdf
  • Park, S., Choi, G. J., & Ko, H. (2020). Information technology–based tracing strategy in response to COVID-19 in South Korea—privacy controversies. Jama.
  • Philkotse. (2019). philkotse.com. https://philkotse.com/market-news/market-analysis-downfall-in-world-car-sales-for-the-first-half-2019-5298
  • Cavallo, C., Caracciolo, F., Cicia, G., & Del Giudice, T. (2018). Extra‐virgin olive oil: are consumers provided with the sensory quality they want? A hedonic price model with sensory attributes. Journal of the Science of Food and Agriculture, 98(4), 1591-1598.
  • Ramya, N., & Ali, S. M. (2016). Factors affecting consumer buying behavior. International journal of applied research, 2(10), 76-80.
  • Rebelo, J., Lourenço-Gomes, L., Gonçalves, T., & Caldas, J. (2019). A hedonic price analysis for the Portuguese wine market: Does the distribution channel matter?. Journal of Applied Economics, 22(1), 40-59.
  • Reis, H. J., & Silva, J. S. (2006). Hedonic prices indexes for new passenger cars in Portugal (1997–2001). Economic Modelling, 23(6), 890-908. Reuters. (2020). Reuters. Retrieved from https://www.reuters.com/article/us-germany-economy-wages-idUSKBN1JM1AS
  • Rosen, S. (1974). Hedonic prices and implicit markets: Product differentiation in pure competition. Journal of Political Economy, 82, 34–55. https://doi.org/10.1086/260169
  • Statista. (2020). Average price (including tax) of passenger cars in the EU in 2015 and 2019, by country. Retrieved from https://www.statista.com/statistics/425095/eu-car-sales-average-prices-in-by-country/
  • Strateji ve Bütçe Başkanlığı. (2020a). Türkiye Cumhuriyeti Merkezi Yönetim Bütçesi Aylık Bütçe Gerçekleşmeleri. Retrieved from http://www.sbb.gov.tr/merkezi-yonetim-butcesi-aylik-gerceklesmeleri/
  • Strateji ve Bütçe Başkanlığı. (2020b). Türkiye Cumhuriyeti Vergi Gelirleri. https://www.sbb.gov.tr/vergi-gelirleri/
  • Szczesny, J. (2020). Car Sales Losing Momentum as COVID Cases Rise. Retrieved from The Detroit Bureau website: https://www.thedetroitbureau.com/2020/07/car-sales-losing-momentum-as-covid-cases-rise/
  • The World Bank. (2020). GDP per capita (current US$). Retrieved from https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?name_desc=false
  • Trading Economics. (2020). Trading Economics. Retrieved from https://tradingeconomics.com/country-list/gdp
  • Wang, X. Y., & Zhang, P. (2008). Disclosure and Insider Trading Profiteering Strategy- Case Study Using a Sample of Six Corporations in a Share Marketplace. Journal of Management Case Studies, 3.
  • World Health Organization. (2020). World Health Organization. Retrieved February 4, 2021, from https://www.who.int/news/item/27-04-2020-who-timeline---covid-19
There are 45 citations in total.

Details

Primary Language English
Journal Section Research Articles
Authors

Mustafa Koç 0000-0003-2737-9324

Nurcan Kostak 0000-0002-0493-1254

Publication Date October 20, 2021
Submission Date April 5, 2021
Published in Issue Year 2021 Issue: 46

Cite

APA Koç, M., & Kostak, N. (2021). What is happening to used car prices in Turkey? Evidence from Hedonic Price Model (HPM). Selçuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi(46), 225-240. https://doi.org/10.52642/susbed.909818

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