Information Salience and Vehicle Idling Behavior : Evidence from Taxis in Singapore

We present new evidence that providing information intervention is a cost-efficient way to optimize an individual's decision-making process. Using the Taxi Management System implemented by Singapore Changi Airport on December 25, 2009 as a source of exogenous variation for identification, we employ a difference-in-differences approach to evaluate the effectiveness of providing salient information of the queuing situations to taxi drivers in reducing vehicle idling behavior. Specifically, we use a proprietary dataset on GPS trajectory of two-thirds of taxis in Singapore in 2009 and 2010 to construct accurate and consistent measures of vehicle idling. We document two main findings: first, providing salient real-time information to drivers effectively and immediately reduces taxis' idling behavior, and the effects are persistent in the long-run; second, reducing the spatial and temporal misallocation at the airport is the underlying mechanism for mitigating taxi drivers' idling behavior. Finally, we conduct a back-of-the-envelope calculation to estimate the lower-bound social benefits brought by the reduction of taxi drivers' idling behaviors