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Cited by 1,218Labor market dynamics and wage inequalityGender, Labor, and Family DynamicsEmployment, Labor, and Gender Studies

Labor Supply of New York City Cabdrivers: One Day at a Time

Camerer, C., Babcock, L., Loewenstein, G., Thaler, R.·1997·The Quarterly Journal of Economics
DOI 10.1162/003355397555244
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Abstract

Life-cycle models of labor supply predict a positive relationship between hours supplied and transitory changes in wages. We tested this prediction using three samples of wages and hours of New York City cabdrivers, whose wages are correlated within days but uncorrelated between days. Estimated wage elasticities are significantly negative in two out of three samples. Elasticities of inexperienced drivers average approximately −1 and are less than zero in all three samples (and significantly less than for experienced drivers in two of three samples). Our interpretation of these findings is that cabdrivers (at least inexperienced ones): (i) make labor supply decisions “one day at a time” instead of intertemporally substituting labor and leisure across multiple days, and (ii) set a loose daily income target and quit working once they reach that target.

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  • Professional sports card dealers, condominium investors (rather than owners), and experienced cab drivers show less apparent response to loss than less experienced agents.

    “Indeed, professional sports card dealers (45), condominium investors (rather than owners) (31), and experienced cab drivers (32) show less apparent response to loss than less experienced agents.”

    From Thinking like a trader selectively reduces individuals' loss aversion (2009) · cites this paper as [32]

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Authors
Camerer, C., Babcock, L., Loewenstein, G., & Thaler, R.
Affiliations
  • California Institute of Technology (US)
  • Carnegie Mellon University (US)
  • University of Chicago (US)
Corresponding author
Camerer, C.
ORCID
Venue
The Quarterly Journal of Economics
Publisher
Oxford University Press (OUP)
Published
1997-05-01
Volume
112
Issue
2
Pages
407-441
ISSN
  • 0033-5533 (ISSN-L)
  • 1531-4650
DOI
10.1162/003355397555244
OpenAlex
W2170411204
Cited by
1,218
References
44
Citations by year
2026: 37 · 2025: 43 · 2024: 39 · 2023: 56 · 2022: 64 · 2021: 66 · 2020: 72 · 2019: 72 · 2018: 64 · 2017: 85 · 2016: 60 · 2015: 67 · 2014: 59 · 2013: 54 · 2012: 55
FWCI
20.21
Type
journal article
Language
en
Open access
closed
Locations
  • The Quarterly Journal of Economics (publishedVersion)
  • CaltechAUTHORS (California Institute of Technology) (submittedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • HighWire Press Open Archive (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
  • Social Sciences › Gender Studies › Gender, Labor, and Family Dynamics
  • Social Sciences › Safety Research › Employment, Labor, and Gender Studies
Keywords
labor supply, taxi drivers, wage elasticity, working hours, life-cycle model, intertemporal substitution, New York City

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