Taxi Market Deregulation: Effects on Market Outcomes, Tax Evasion and Crime

Jarkko Harju, Ida Kankaanranta and Kaisa Kotakorpi

No 12819, CESifo Working Paper Series from CESifo

Abstract: We study the effects of taxi market deregulation in Finland, which removed price controls and lowered barriers to entry. The reform led to a surge in firm entry and a modest increase in exit, indicating substantial changes in market structure. Average taxi prices increased slightly according to price indices, while monthly firm-level reported sales and VAT declined by over 10 percent. Operating costs and mileage remained largely unchanged, suggesting limited demand responses. These findings point to increased tax evasion following deregulation. Consistent with this interpretation, we document a small rise in property crime, with no effects on other criminal offenses.

Keywords: taxi market; deregulation; prices; sales; mileage; exit; entry; tax evasion; crime (search for similar items in EconPapers)
JEL-codes: H26 L52 L91 L98 (search for similar items in EconPapers)
Date: 2026
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