Status matters a lot to human beings. Economists have long understood this, but have found it almost impossible to research and understand how much we value things that we believe give us status but seem to have little other use. Most economics textbooks simply ignore concerns about status, but now University of Warwick Economics researchers Matthew Corder and Professor Andrew Oswald have discovered a way to analyse it by examining the demand for personalised car number plates.
The researchers collected data from DVLA auctions of 2748 personalised number plates - in particular the last two Classic Collection auctions at Newport and Linton, and the last Custom Marks auction at Pontefract. Their analysis revealed the following about how much and why the customers for those number plates valued the status the number plates would bring:
- Having a person's surname in a number plate raises the plate's value by £1300.
- Having a person's first name in a number plate is worth £1100.
- Having a number 1 at the start of a number plate makes it worth an extra £1000.
- People severely 'over-pay' (by about £2500) for registrations sold in DVLA Classic Collection auctions rather than DVLA Custom Marks auctions. This may be because richer people attend, or because they get carried away by the term 'Classic' in the title of the auction.
- A word (other than a person's name) in a number plate has only marginal benefit - £200 at most.
- Shortness of number plates always adds value.
- However extra letters reduce a plate's value by more than extra numbers.
- An S at the start of a number plates raises its value by £1000. An F lowers it by about £500. The researchers are not sure why these letters are so special.
- The researchers also found that it pays to buy late in an auction. A number plate sold at the end of a 1000-lot auction goes on average for 350 pounds less than an equivalent one sold at the start.
Professor Andrew Oswald said:
"The number plate market is a fascinating one for economists. Simply for a 5 inch by 15 inch rectangle of plastic, some people will pay the price of a flat in a nice English city. One thing that surprised us is how little value the market assigns purely to short words themselves like CAT or BOY or HOT. It is names that boost the price. This market is really about ego. Amazing. Human beings are remarkable creatures."
Note for editors: The statistical formula for calculating the price of such a number plate is: Price = 4619 - (0.352xLot Number) + (2596xBeing in a Classic Collection) + (1122xFirst Name) + (1256xSurname) - (1149xHaving 2 Letters) - (2125x3 Letters) - (2714x4 Letters) - (3015x5 Letters) - (780x2 Numbers) - (829x3 Numbers) - (3105x4 Numbers) - (565xFirst Digit F) + (1072xFirst Digit S) - (1042xFirst Digit is a 2) - (717xFirst Digit 3) - (832xFirst Digit 4) - (700xFirst Digit 5) - (686xFirst Digit 6) - (796xFirst Digit 7) - (553xFirst Digit 9)
For further information contact:
Professor Andrew Oswald, University of Warwick
Tel: 024 76 523510 (Office), 01367 860005 (Home office)
Matthew Corder tel: 07740 195067 email: email@example.com