Balloting of COEs

Singapore introduced the Certificate of Entitlement (COE) for purchase of cars 

22 years ago. It served a useful purpose in controlling the number of cars on 

the road.

Over the years, many people have complained that the system of bidding for the COE 

favors the wealthy at the expense of "more deserving" families that cannot compete in

paying the high price for the paper.

The suggestion of balloting the COEs have been raised many times, but was 

not accepted by the government on economic arguments, that scare resources are

 best allocated through market pricing. With the high prices of COE in recent months, 

the calls for the use of the ballot system have re-surfaced.

Balloting is not unusual in Singapore. For decades, we have been 

using it to assign new HDB flats to purchasers and primary school places to pupils. The system

was also implemented to give higher priority to certain groups, for example, pupils with
siblings in the same school.

If COEs are balloted, it is possible to fix the rice to reflect demand, but there is no need to
suffer the wild swings and panic buying that are seen in the current system. If the demand
exceed supply, the COEs can be balloted, with a higher chance being given
to "more deserving" families, such as families with children or does not now
own any car.