In the first of the two companion papers, we show that the dynamic aspects of the license utilization decision in an uncertain environment, together with the usual policy of rewarding high license utilization with future license allocations. creates four components of the license price. These...

Under the current taxi licensing system in Hong Kong, holders of taxi licenses are given perpetual operating right in the taxi business. Since 1995, the government has not issued any new taxi licenses. Against this background, the freely traded taxi licenses are often held as an investment...