Estimating the effects of entry regulation in the Istanbul taxicab market

The economic literature shows that entry regulation in taxicab markets brings about a dramatic increase in medallion prices or license values of taxicabs. However, there is no study estimating what the effect of regulation is exactly on real medallion prices. We develop a model to estimate the effect of entry restrictions in the Istanbul taxicab market over real medallion prices and inflation. Our findings contribute that entry regulation in taxicab markets increases medallion prices. Moreover, we find that entry regulation in Istanbul pressures inflation rates as well.

► We develop an innovative model to estimate the real effects of entry regulation in taxicab markets.
► We investigate interaction between regulation and medallion prices in the Istanbul taxicab market.
► We estimate that a 1 % decrease in the number of taxis brings about a 0.71 % increase.
► This is an artificial rent on real medallion prices.
► Also, we find that a 1 % increase in medallion prices causes a 0.32 % increase in inflation.