The Economics of Taxis

Cornell University professors C. Kirabo Jackson and Henry S. Schneider have a new working paper out from the National Bureau of Economic Research looking at the economics of the New York City taxi industry. From the abstract: "We study the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes than owner-drivers as a result of a moral hazard associated with incomplete leasing contracts. Using instrumental variables and fixed-effects analyses, we find that: drivers leasing from members of their country-of-birth community exhibit significantly reduced effects of moral hazard."