TITLE:
Reference-Dependent Preferences and the Labor Supply of Chinese Drivers
AUTHORS:
Yunqiu Tu
KEYWORDS:
Reference-Dependent Preferences, Labor Supply, Chinese Driver
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.8 No.9,
September
29,
2020
ABSTRACT: This paper takes a comprehensive study of taxi drivers’ labor supply behavior
using a new dataset of taxi drivers from China. We find strong evidence that
the working hours of drivers are negatively related to the hourly rates, and
this effect is both statistically and economically significant. We then conduct
a discrete-choice model, showing that the probability of stopping keeps
increasing as cumulative working hours increase, but the probability of
stopping first increases and then decreases as the cumulative fare increases.
Lastly, we use the asymmetric model with the income target and working hour
target as dummy variables, and the probability of stopping is significantly
positively related to income target but shows no significant relation with
cumulative fare.