Good Days, Bad Days: Stock Market Fluctuation and Taxi Tipping Decisions

• 成果类型: Article
• 署名作者: Tan, Weiqiang; Zhang, Jian
• 署名单位: Education University of Hong Kong (EdUHK); University of Hong Kong
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.3557
• 发表日期: 2021
• 页码: 3965-3984
• 关键词: consumption; Stock market; loss aversion; Investor mood; taxi tipping

摘要

Using taxicab tipping records in New York City (NYC), we develop a novel measure of real-time utility and quantitatively assess the impact of wealth change on the well-being of individuals based on the core tenet of prospect theory. The baseline estimate suggests that a one-standard-deviation increase in the stock market index is associated with a 0.3% increase in the daily average tipping ratio, which translates to an elasticity estimate of 0.3. The impact is short-lived and in line with the wealth effect interpretation. Consistent with loss aversion, we find that the impact is primarily driven by wealth loss rather than gain. We exploit Global Positioning System and timestamp information and design two difference-in-differences tests to establish causal inference. Exploitation of the characteristics of individual stocks suggests that the effect of wealth change on real-time utility is more pronounced in the stocks of firms with large market capitalization. Finally, our aggregate estimate suggests that annual tip revenue in the NYC taxi industry is associated with stock market fluctuations, ranging from -$17.5 million to $12.9 million.