Now life is never this simple, but we can see that several things will affect the value of cab medallions. Some of the more obvious are: demand for cab rides, cab fares, number of cabs, interest rates.

There are some other factors that also probably affect the value of these medallions that we haven't discussed yet, these include: risk of robbery, risk of accident, expected changes in interest rates and other uncertain factors. The greater the uncertainty associated with any asset, the less valuable it becomes.

So, how much profit do New York cabbies make? It's hard to say but it seems reasonable to guess that its over $10,000 but under $30,000. Keep in mind that this is income above what could be earned in the next best opportunity.

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