The economic effects of government regulation: Evidence from the New York taxicab market


TRANSPORT POLICY, vol.25, pp.169-177, 2013 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 25
  • Publication Date: 2013
  • Doi Number: 10.1016/j.tranpol.2012.11.011
  • Title of Journal : TRANSPORT POLICY
  • Page Numbers: pp.169-177


This paper empirically investigates the economic effects of government regulation in a regulated taxicab market. We use a cointegration model with structural breaks to test the hypothesis that government regulation increases the price of the regulated good and/or causes the monopoly price. We examine the New York taxicab market and argue that regulation brings about artificial rents by increasing medallion prices, and an increase in medallion prices gives rises to upward pressure on taxi fares. The evidence presented shows that regulation of the New York taxicab market increases medallion prices, and this increase in medallion prices pressures on taxi fares. (C) 2012 Elsevier Ltd. All rights reserved.