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"What Factors Affect My Prices?" An Analysis of an Auto Salvage Auction


Name: Andrew Winters
Year of Graduation: 2007
Hometown: Green Bay, WI
Major: Economics, Mathematics

Name: Dr. Marc von der Ruhr, Associate Professor of Economics
Research Specialty: Applied International Trade



The research I had the opportunity to pair with Dr. von der Ruhr on focused on an auto salvage auction facility who was interested in gaining a better understanding of their auction prices. An important piece of the project was visiting a live auction and conducting interviews with the organizers and participants as well as reviewing industry publications to gain an understanding of auto auction industry. After background research was complete, a linear regression model was built to explain winning bid prices. True to basic economic principles, we found that factors affecting the final auto salvage auction bid prices are related to the auction’s supply of vehicles, the demand for auctioned vehicles, and the macroeconomy. Particularly interesting results included finding the lift in price associated with driving a vehicle past bidders vs. an immobile vehicle in the lot and a ranking of price differences according to the vehicle’s title and damage types.

The opportunity to work on a real, contracted analytics project as an undergraduate in college with extremely limited work experience was an opportunity too good to pass up. One important thing I learned specifically from this experience was the importance of planning and developing a sound understanding of the industry before even attempting any analysis. Anyone can throw a bunch of variables in a model and get some neat numbers to slap on a powerpoint. But for trust-worthy model and results, an absolute prerequisite is a sound understanding of the industry.

 The project was a direct extension of the Econometrics classes taught by Dr. von der Ruhr. In those classes we learned the techniques involved in researching, building, and testing a statistical model. Additionally, and probably more importantly, we learned how to interpret our results and present them in easily digestible terms to a variety of different audiences. This research, as well as my current role as a Consultant for Marketing Analytics, involves all of those aspects of our education.

The primary benefactor of our research was the client of MiSix, Inc. who was trying to answer a critical business question, “What factors affect my prices?” Because of our research, the client extracted some meaningful and actionable recommendations on future business decisions just from a pile of data. Being the first intern to participate in the joint program, the goal was two-fold: to provide the client solid results they can use to inform future strategic decisions, and to successfully grow the relationship between St. Norbert and MiSix to afford more students the opportunity I had.

Professor Marc von der Ruhr
Andrew and I were the first team to conduct market research with MiSix, Inc. collaborating with Andy Martinelli (2002). The opportunity to conduct this work was very rewarding, as we applied the economic way of thinking to theoretically consider what impacted auto auction prices. No theoretical work had previously been done, so we had an excellent opportunity to establish a model for the entire field. Andy, at MiSix, provided us a data set with well over one million observations that allowed us to test many theories and eventually explain a very interesting story of how the auction market worked in the client’s specific industry.
Andrew Winters
Andrew Winters

“The opportunity to work on a real, contracted analytics project as an undergraduate in college with extremely limited work experience was an opportunity too good to pass up. One important thing I learned specifically from this experience was the importance of planning and developing a sound understanding of the industry before even attempting any analysis.”



St. Norbert Collaborative

Phone: (920) 403-3147
Fax: (920) 403-4086
E-mail: collaborative@snc.edu


St. Norbert College • 100 Grant Street • De Pere, WI 54115-2099 • 920-337-3181