Reference-Dependent Preferences and Labor Supply: The Case of New York City Taxi Drivers
American Economic Review · 2008 · Volume 98 · Issue 3
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
Time Allocation and Labor Supply, Railroads and Other Surface Transportation
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