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The Real Reason You Can't Get a Cab in the Rain

They’ve figured out why the payoff from rainy days is so skimpy

The classic 1997 behavioral economics paper, Labor Supply of New York City Cabdrivers: One Day at a Time, had a simple explanation for why finding a cab is hard when it rains in New York. More people want taxis when the weather’s lousy, but fewer are on the road. Demand up, supply down. The study’s authors speculated that the reason cabs get off the road is that drivers set themselves earnings targets, and they reach them sooner on rainy days. Their conclusion wasn’t flattering: Drivers were either irrational or naive to leave extra earnings on the table.

Princeton economist Henry Farber thinks otherwise. For a paper issued in October, Why You Can’t Find a Taxi in the Rain and Other Labor Supply Lessons From Cab Drivers, he used data on 5 million shifts and 8,800 drivers from 2009 to 2013 from the New York City Taxi and Limousine Commission. Farber crunched data on the length of each ride to calculate drivers’ wages per minute. Then he compared trips against the daily rainfall records for Central Park.