Guanfu Fang a, Guanliang Hu b , Lan Yao c
Author information
a School of Business, Shanghai University of International Business and Economics, Shanghai 201620, China
b School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China
c School of Economics, Shanghai University of Finance and Economics, Shanghai 200433, China
E-mail: guanfufang@suibe.edu.cn (Guanfu Fang), yao.lan@mail.shufe.edu.cn (Lan Yao)
This paper investigates the daily labor supply decisions of Hangzhou cabdrivers. We find that Hangzhou cabdrivers’ wage elasticity is significantly positive, their working decisions are largely affected by shift time, and crude proxy variables for income; hours targets can hardly explain their working behavior. Nevertheless, Hangzhou cabdrivers are still affected by reference dependent preference. Using new empirical strategies, we show that cabdrivers are more likely to continue working when wage rates are unexpectedly low and more likely to quit when wage rates are unexpectedly high.
reference dependent preference, wage elasticity, labor supply, income shock
Guanfu Fang, Guanliang Hu, Lan Yao. Reference Dependent Preference and Labor Supply: Evidence from China. Front. Econ. China, 2019, 14(2): 264‒301 https://doi.org/10.3868/s060-008-019-0013-8