ANALYZING THE EFFECTS OF HURRICANE SANDY ON TIPPING DECISIONS IN TAXIS IN NEW YORK CITY

Abstract

In this study, I examine the effects Hurricane Sandy had on the tipping decisions passengers made in New York City’s taxis. I also investigate how these effects changed over time, varied by income, and differed based on the availability of directly comparable subway routes for a given taxi ride. Using data on transactions in New York City’s taxis from midSeptember to mid-December 2012, I extract three separate subsamples for analysis: a random sample and two subsamples I select using criteria I define relating to income and subway availability, respectively. I then use fixed effects and linear regressions to analyze the effect Hurricane Sandy had on various tipping-related outcome variables. Through my analysis, I find that Hurricane Sandy caused a temporary decrease in the probability of taxi riders giving a tip, yet led to an increase in tip percentages among riders who chose to tip. I also find that the hurricane’s impact on the probability of taxi riders giving a tip differed based on riders’ income, which I approximate using the income of the pickup and drop-off locations of their taxi ride. In addition to using a unique process to select subsamples from the dataset for analysis, this study contributes to existing literature that focuses on the impact of various shocks on tipping behavior and to the literature on Hurricane Sandy’s impact on New York City.