Do Social Connections Reduce Moral Hazard? Evidence from the New York City Taxi Industry

• 成果类型: Article
• 署名作者: Jackson, C. Kirabo; Schneider, Henry S.
• 署名单位: Northwestern University; Cornell University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.3.3.244
• 发表日期: 2011
• 页码: 244-267
• 关键词: asset ownership; credit programs; incentives; performance; bangladesh; DESIGN

摘要

This study investigates the role of social networks in aligning the incentives of agents in settings with incomplete contracts. Specifically, the study examines the New York City taxi industry where taxis are often leased and lessee-drivers have worse driving outcomes than owner-drivers due to moral hazard. Using within-driver variation and instrumental variable strategies to remove selection, we find that drivers leasing from members of their country-of-birth community exhibit significantly reduced effects of moral hazard, representing an improvement of almost one-half of a standard deviation of the outcome measures. Screening is ruled out as an explanation, and other mechanisms are investigated. (JEL D82, D86, L92, Z13)