Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers
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- 1 May 2008
- journal article
- Published by American Economic Association in American Economic Review
- Vol. 98 (3) , 1069-1082
- https://doi.org/10.1257/aer.98.3.1069
Abstract
I develop a model of daily labor supply where preferences are dependent on a reference daily income level, and I apply this model to data on the labor supply of New York City taxi drivers. I find that there may be a reference level of income on a given day that affects labor supply. However, there is substantial day-to-day variation in a given driver's reference level, and most shifts end before reaching the reference income level. This pattern is inconsistent with an important role for reference-dependent preferences.Keywords
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