Marco Stenborg Petterson - Estimation of a Latent Reference Point
Meeting Room 1 (San Giobbe Economics Campus) + Live streaming (ZOOM)
Marco Stenborg Petterson (Brown University) - Estimation of a Latent Reference Point: Method and Application to NYC Taxi Drivers
I use a dynamic discrete choice model with a latent variable to flexibly estimate reference-dependent utility models. The structure and evolution of the reference point are estimated directly from observational data. I apply the model to the daily labor-supply choices of NYC taxi drivers and use a Bayesian estimation approach. I find that rational expectations are an important determinant of the reference point but do not fully explain its evolution. The reference point adjusts asymmetrically, responding more to positive income shocks than to negative ones. The reference point also has an important transitory component: a shock to the reference point dissipates within hours. I use the estimated model to analyze the welfare effects of a guaranteed hourly wage floor for gig economy workers.
The seminar can be attended also remotely, connecting to ZOOM: https://unive.zoom.us/j/87505685385
ID riunione: 875 0568 5385
L'evento si terrà in Inglese