Commenting on the increasing Certificate of Entitlement (COE) premiums, SMU Assistant Professor of Strategy & Entrepreneurship (Education) Terence Fan – who has researched the relationship between inflation and COE premiums – said that inflation directly impacts COE premiums, with every one percentage point in the consumer price index increase leading to a 1.6 per cent rise in Category B COE prices. He pointed out that despite inflation's potential to lower COE prices by reducing demand, factors such as rising incomes counteract this effect and drive COE prices higher. Asst Prof Fan also noted that while increased rail infrastructure can slightly reduce COE premiums, he believes that Electronic Road Pricing 2.0 to replace COE would require significantly higher pricing to manage congestion effectively, and could benefit travellers in less congested areas or off-peak periods.
