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Reference-dependent behaviour of paua (abalone) divers in New Zealand

Håkan Eggert () and Viktoria Kahui ()
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Viktoria Kahui: University of Otago, Dept of Economics, Postal: PO Box 56, Dunedin, New Zealand

No 513, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We study dynamic labour supply using data on paua (abalone) divers in New Zealand. The divers face stable, flat prices per kilogram after each catch, but experience transitory wage changes due to varying weather and water conditions, and are free to vary their daily working hours and display an intermittent working pattern. We find non-linear wage elasticities, rejecting the standard neo-classical prediction. We explore potentially distorting factors, but find little evidence. Applying Kszegi and Rabin’s (2006) theory where workers have both income and hours targets could explain our result. In particular, our divers appear to be primarily guided by the hours target. http://hdl.handle.net/2077/26589

Keywords: labour supply; wage elasticity; income e target; reference-dependent (search for similar items in EconPapers)
JEL-codes: J01 J22 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2011-08-26
New Economics Papers: this item is included in nep-lab
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