Yesterday, Abdul Hamid Jonid was declared the winner of the Media Subaru Car Challenge 2017, bagging the top prize of a Subaru XV 2.0 i-S, worth S$65,000.
The Mediacorp Subaru Car Challenge has been an annual event in Singapore for the past 16 years. The rules of the game is simple: be the last remaining contestant to keep your right palm on the car and win a brand new Subaru (excluding COE).
While we understand that the challenge is a competition, we couldn’t help but wonder to ourselves if participating in the challenge actually makes any financial sense for the contestants.
People Join The Subaru Challenge To Make Money
Say all you want about the thrill of competing but the motivation to participate in this challenge is pretty simple; standing a chance to win a new and expensive car.
This isn’t very different from people spending money to buy a 4D or TOTO ticket, where punters hope to score a big win in spite of the odds being stacked against them. And as we have written in previous articles, the expected value of any lottery game is always negative, be it your Hong Bao Draw for TOTO, soccer betting or playing Jackpot.
Calculating Our Expected Value
Here’s a method that we used to calculate the expected value for the challenge. You do not have to agree with our method.
Total Value Of Car / Total Number Of Participants = Expected Value
$65,000 / 400 = $162.50
The math here is simple. With 400 participants competing, the chance of each person winning is 0.25%, translating into an expected value of $162.50.
Not very attractive isn’t it. It only becomes worse.
The “Cost” Of Participating
Unlike gambling, contestants for the Subaru challenge do not need to pay to compete. However, they have to spend a lot of time competing in the challenge. The 2016 winner, a Singaporean, lasted almost 76 hours to win last year’s challenge.
According to the Mediacorp Challenge Facebook Page, 100 contestants were left after 31 hours in this year’s challenge. That means about 75% of contestants survived for less than 31 hours.
If we were to assume an average of 24 hours spent by each contestant in the challenge, it would translate to a payout of about $6.77 per hour. We are not sure about you but this doesn’t seem very attractive for us.
There are other ways of looking at the “cost” of participating. One other method will be to base it on an average full-time salary in Singapore. In order to participate for 24 hours, a gainfully employed individual would need to take at least two days of leave.
Based on the median salary of people in Singapore as of 2016, the gross salary is $3,466. If we assume 22 workdays in a month, then the average person would be paid $157.58 per day. This means the cost of taking two days of leave would be $315, far higher than the expected value of $162.50 for participating.
The last way of measuring the cost of participating in the challenge is to simply base it on what you can earn from a part-time job. As long as you are able to find any part-time job that pays you more than $6.77 per hour, you are better off financially not participating.
The Gamblers Logic
Of course, the gambler’s logic suggests that people are inherently interested in big wins. That’s why people spend millions of dollars (collectively) only to win a smaller pool of money (collectively) and yet enjoy themselves in the process.
Once you take away the competitive aspect of the Subaru challenge, the same logic applies. A large group of people crowding around, literally, for a few days in order for just one person to walk away with a prize worth $65,000. It doesn’t make any economic, financial or productivity sense but it is hope that is ultimately being sold here.
Do you agree with our assessment of the Mediacorp Subaru challenge? Discuss with us your views on our Facebook page as we would love to hear from you.