The Amazing $1 Million NYC Taxi Medallion

From the wonderful world of bizarre prices, a New York City taxi cab medallion -- that's the tin plate you nail to the hood of a yellow cab --  was sold this week for $1 million, an all-time record.

As we reported a month ago, holding a NYC taxi cab medallion has been a better investment than housing or gold over the last 30 years. The tin plate's price has increased 1,900% since 1980, which is four-times faster than the price increase of an average home or a brick of gold, according to Bloomberg Businessweek.



Data: Federal Housing Finance Agency, New York City Taxi and Limousine Commission

What's behind the surge? It's all about supply and demand. The tailwind behind medallion inflation is a cap on taxi cab licenses. Even as the economy of New York City grew at a furious pace across three decades, the number of taxi plates stayed basically constant, despite wage growth and population growth and rising demands for cross-town transportation. As a result, their value rose tremendously. 

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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