Article
Moral Hazard in Leasing Contracts: Evidence from the New York City Taxi Industry
Journal of Law and Economics (2010)
  • Henry S Schneider , Cornell University
Abstract

In this study, I investigate the effects of moral hazard in leasing contracts by examining the driving outcomes of all long-term lessees and owner-operators of New York City taxis. I find that moral hazard explains a sizable fraction of lessees’ accidents, driving violations, and vehicle inspection failures. To address the possibility of endogenous contract choice, I conduct an instrumental variables analysis of the cross section of all drivers and a panel-data analysis of a subset of drivers who switched from leasing to owning.

Publication Date
November, 2010
Citation Information
Henry S Schneider. "Moral Hazard in Leasing Contracts: Evidence from the New York City Taxi Industry" Journal of Law and Economics Vol. 53 Iss. 4 (2010)
Available at: http://works.bepress.com/henry_schneider/2/