Why does this appreciate @ 15% per annum?

Every taxi on the streets of New York City is required to display the city-issued medallion.

N.Y.'s Taxi Medallions Beat Stocks, Sell for $477,666

Excerpt:

In New York, the capital of world finance, the hottest investment isn't stocks, bonds, commodities or even Manhattan apartments. It's taxi medallions, the metal plates affixed to the hoods of the city's 12,779 yellow cabs.

The value of the taxi licenses has soared as much as 40 percent since the city sold 300 of them in October 2004. In that period, stocks gained about 10 percent, futures contracts for commodities such as grains, energy and metals rose 16 percent, and 10-year U.S. Treasury notes fell 2 percent. The median price for Manhattan co-ops or condominiums climbed 23 percent.

...


The city began limiting the number of medallions on the market in 1937, when they sold for $10. By the mid-1940s, there were 11,787. No additional medallions were sold until 1996, almost 60 years later.

Increasing the number of medallions requires state and local legislative approval, which can take years to obtain, Taxi & Limousine Commissioner Matthew Daus says. While he is seeking authorization for 150 more licenses for wheelchair-accessible cabs, Daus says he doesn't know when the next sale will be.

Comment: Imagine this ... what Grandpa could have purchased for $ 10. in 1937, is now worth half a million dollars! Why? Supply and demand!

An interesting overview of the taxi medallion system

See this prior post: The Minneapolis Taxi Cartel