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An Economic Analysis of Regulated Taxicab Markets

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Abstract

The literature on taxicab markets has provided theoretical insights regardingthe peculiarities of taxicab markets. A key finding is the positive effect thatexcess capacity, in the form of vacant taxicabs, has on the demand for taxicabservice. Lack of data on taxicab markets has made estimating these modelsdifficult. This paper models a taxicab market in which entry and fares areregulated. It estimates the model using data from meter inspections of NewYork City taxicabs. It finds a positive, inelastic relationship between vacanttaxicabs and demand for taxicab service. The estimates of the parameters ofthe model are used to evaluate the effects of policy changes such as increasesin the regulated fare and in the number of taxicab medallions.

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Authors and Affiliations

  1. Department of Economics, Skidmore College, 815 N Broadway, Saratoga Springs, NY, 12866, U.S.A.

    Daniel Flores-Guri

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  1. Daniel Flores-Guri
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Flores-Guri, D. An Economic Analysis of Regulated Taxicab Markets. Review of Industrial Organization 23, 255–266 (2003). https://doi.org/10.1023/B:REIO.0000031368.93775.0a

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  • DOI: https://doi.org/10.1023/B:REIO.0000031368.93775.0a

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