Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers
- (pp. 1069-82)
AbstractI 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.
CitationFarber, Henry S. 2008. "Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers." American Economic Review, 98 (3): 1069-82. DOI: 10.1257/aer.98.3.1069
- J22 Time Allocation and Labor Supply
- L92 Railroads and Other Surface Transportation