Loss Aversion and Labor Supply
Lorenz Goette (),
David Huffman () and
Ernst Fehr ()
No 178, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich
In many occupations workersï¿½ labor supply choices are constrained by institutional rules regulating labor time and effort provision. This renders explicit tests of the neoclassical theory of labor supply difficult. Here we present evidence from studies examining labor supply responses in ï¿½neoclassical environmentsï¿½ in which workers are free to choose when and how much to work. Despite the favorable environment the results cast doubt on the neoclassical model. They are, however, consistent with a model of reference dependent preferences exhibiting loss aversion and diminishing sensitivity.
Keywords: loss aversion; labor supply (search for similar items in EconPapers)
JEL-codes: J22 B49 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
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Journal Article: Loss Aversion and Labor Supply (2004)
Working Paper: LOSS AVERSION AND LABOR SUPPLY (2004)
Working Paper: Loss Aversion and Labor Supply (2003)
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