Scandinavian Working Papers in Economics
Working Papers in Economics,
University of Gothenburg, Department of Economics
No 513: Reference-dependent behaviour of paua (abalone) divers in New Zealand
Håkan Eggert () and Viktoria Kahui ()
Additional contact information
Håkan Eggert: Department of Economics, School of Business, Economics and Law, Göteborg University, Postal: Box 640, SE 40530 GÖTEBORG
Viktoria Kahui: University of Otago, Dept of Economics, Postal: PO Box 56, Dunedin, New Zealand
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
44 pages, August 26, 2011
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