{"componentChunkName":"component---src-templates-post-query-tsx","path":"/research/low-expectations-reference-dependent-preferences-and-labor-supply-in-cape-town-south-africa/","result":{"pageContext":{"post":{"slug":"/research/low-expectations-reference-dependent-preferences-and-labor-supply-in-cape-town-south-africa/","title":"Low Expectations: Reference-Dependent Preferences and Labor Supply in Cape Town, South Africa","date":"Mar 01, 2012","timeToRead":1,"description":"Reference-dependent decision-making – the core of behavioral economics’ prospect theory – makes people more likely to choose an outcome that they expect to receive.","body":"function _extends() { _extends = Object.assign || function (target) { for (var i = 1; i < arguments.length; i++) { var source = arguments[i]; for (var key in source) { if (Object.prototype.hasOwnProperty.call(source, key)) { target[key] = source[key]; } } } return target; }; return _extends.apply(this, arguments); }\n\nfunction _objectWithoutProperties(source, excluded) { if (source == null) return {}; var target = _objectWithoutPropertiesLoose(source, excluded); var key, i; if (Object.getOwnPropertySymbols) { var sourceSymbolKeys = Object.getOwnPropertySymbols(source); for (i = 0; i < sourceSymbolKeys.length; i++) { key = sourceSymbolKeys[i]; if (excluded.indexOf(key) >= 0) continue; if (!Object.prototype.propertyIsEnumerable.call(source, key)) continue; target[key] = source[key]; } } return target; }\n\nfunction _objectWithoutPropertiesLoose(source, excluded) { if (source == null) return {}; var target = {}; var sourceKeys = Object.keys(source); var key, i; for (i = 0; i < sourceKeys.length; i++) { key = sourceKeys[i]; if (excluded.indexOf(key) >= 0) continue; target[key] = source[key]; } return target; }\n\n/* @jsxRuntime classic */\n\n/* @jsx mdx */\nvar _frontmatter = {\n  \"title\": \"Low Expectations: Reference-Dependent Preferences and Labor Supply in Cape Town, South Africa\",\n  \"date\": \"2012-03-01\",\n  \"template\": \"post\",\n  \"slug\": \"low-expectations-reference-dependent-preferences-and-labor-supply-in-cape-town-south-africa\",\n  \"postedLink\": \"https://riceinstitute.org/research/low-expectations-reference-dependent-preferences-and-labor-supply-in-cape-town-south-africa/\",\n  \"description\": \"Reference-dependent decision-making – the core of behavioral economics’ prospect theory – makes people more likely to choose an outcome that they expect to receive.\",\n  \"tags\": \"Research\",\n  \"banner\": \"\"\n};\nvar layoutProps = {\n  _frontmatter: _frontmatter\n};\nvar MDXLayout = \"wrapper\";\nreturn function MDXContent(_ref) {\n  var components = _ref.components,\n      props = _objectWithoutProperties(_ref, [\"components\"]);\n\n  return mdx(MDXLayout, _extends({}, layoutProps, props, {\n    components: components,\n    mdxType: \"MDXLayout\"\n  }), mdx(\"p\", null, \"Author: Dean Spears\"), mdx(\"p\", null, \"Published in: \", mdx(\"em\", {\n    parentName: \"p\"\n  }, \"Poverty & Public Policy\")), mdx(\"p\", null, mdx(\"a\", {\n    parentName: \"p\",\n    \"href\": \"https://github.com/riceinstitute/content/blob/release/research/spears-2012-low-expectations-reference-dependent-preferences-and-labor-supply-in-cape-town-south-africa.pdf\",\n    \"target\": \"_blank\",\n    \"rel\": \"noopener noreferrer\"\n  }, \"Download Paper\")), mdx(\"p\", null, \"Abstract:\"), mdx(\"p\", null, \"Reference-dependent decision-making \\u2013 the core of behavioral economics\\u2019 prospect theory \\u2013 makes people more likely to choose an outcome that they expect to receive. Reference-dependence therefore may imply the perpetuation of disadvantage: people who do not expect an opportunity may be less likely to \\u201Cseize the day\\u201D if one unexpectedly arrives. \"), mdx(\"p\", null, \"We find evidence of this possibility in labor supply decision-making in two datasets about a high-unemployment part of Cape Town, South Africa, including a panel. People with low expectations for finding a job \\u2013 that is, people who expect to be unemployed \\u2013 are less likely to report accepting several hypothetical job offers. This result is robust to a range of respecifications, including adding a range of control variables for desire and ability to work, including reservation wages. \"), mdx(\"p\", null, \"The finding appears to arise according to the theorized mechanisms. To our knowledge, this is the first indication of reference dependent labor supply in a developing country, where especially low expectations could have particularly important consequences.\"));\n}\n;\nMDXContent.isMDXComponent = true;","tags":[{"name":"Research","slug":"research"}],"banner":null}}},"staticQueryHashes":["318001574","3787687951","3787687951"]}