Replication data for: Frictions in a Competitive, Regulated Market: Evidence from Taxis

Summary:  View help for Summary This paper presents a dynamic equilibrium model of a taxi market. The model is estimated using data from New York City yellow cabs. Two salient features by which most taxi markets deviate from the efficient market ideal are, first, matching frictions created by the need for both market sides to physically search for trading partners, and second, regulatory limitations to entry. To assess the importance of these features, we use the model to simulate the effect of changes in entry, alternative matching technologies, and different market density. We use the geographical features of the matching process to back out unobserved demand through a matching simulation. The matching function exhibits increasing returns to scale, which is important to understand the impact of changes in this market and has welfare implications. For instance, although alternative dispatch platforms can be more efficient than street-hailing, platform competition is harmful because it reduces effective density.

JEL Classification:  View help for JEL Classification
      C78 Bargaining Theory; Matching Theory
      L51 Economics of Regulation
      L84 Personal, Professional, and Business Services
      L92 Railroads and Other Surface Transportation
      L98 Industry Studies: Utilities and Transportation: Government Policy
      R48 Transportation Economics: Government Pricing and Policy