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What is the "true" value of a taxi medallion, in a regulatory context where the government is setting the supply? You can compute the present value of the tota
by ams6110 9y ago
What is the "true" value of a taxi medallion, in a regulatory context where the government is setting the supply?
You can compute the present value of the total profit you can expect to earn (average fares less expenses including the medallion) and if it's less than what the medallion costs, the medallion is overpriced.
- didibus 9y agoI don't think it was though. A medallion would make you around 50k in profit a year. Medallion's were a great investment, but the greatnest of them depended 100% on the government regulations staying relatively the same.
- wutbrodo 9y ago> You can compute the present value of the total profit you can expect to earn This isn't what we're talking about here. That's the equilibrium market price of the medallion, but the person I was responding to was saying that the overinflation due to supply restriction through gov't policy (i.e. medallions) was what was causing market value to diverge from "true" value. The fact that his goal is basically unreachable is sort of my point: his definition of "true" involves an ideal world in which taxis are optimally regulated.