"The Real Effects of Climate Change in Poor Countries: Evidence from the Permanent Shrinking of Lake Chad" [Download PDF] (with Remi Jedwab, Federico Haslop, and Carlos Rodríguez-Castelan)
Due to identification concerns, empirical studies of the economic effects of climate change typically rely on "climate shocks" for their analysis, hence year-to-year climate variations. The economic effects of slow and permanent changes in climate-driven geographical conditions, i.e. climate change as defined by the IPCC, have been investigated very little in comparison. We focus on Lake Chad, a vast African lake the size of Israel or Massachusetts that, for exogenous reasons, shrunk by 90% between the 1960s and the late 1980s. While water supply decreased, land supply increased, generating a priori ambiguous effects, and making the increasing worldwide disappearance of lakes an important trend to study. For Cameroon, Chad, Nigeria and Niger -- 25% of sub-Saharan Africa's population --, we construct a novel data set tracking population patterns at a fine spatial level from the 1940s to the 2010s. Difference-in-differences show slower growth in the proximity of the lake, but only after the lake started shrinking. Thus, the negative water supply effects on fishing, in addition to farming and herding, outweighed any positive land supply effects. A quantitative spatial model is used to rationalize these results as well as estimate aggregate welfare losses. The model also allows us to study the aggregate and spatial effects of policies related to migration, trade, land use, roads, and cities.
"Spatial Misallocation, Informality and Transit Improvements: Evidence from Mexico City" [Download PDF]
Urban Economics Association 2020 Student Prize (Honorable Mention)
This paper proposes a new mechanism to explain resource misallocation in developing countries: the high commuting costs within cities that prevent workers from accessing formal employment. To test this mechanism, I combine a rich collection of microdata and exploit the opening of new subway lines in Mexico City. I find that transit improvements reduce informality rates by seven percent in areas near the new subway stations. I develop a spatial model that accounts for the direct effects of transit infrastructure in perfectly efficient economies and on allocative efficiency. Changes in allocative efficiency driven by workers' reallocation to the formal sector amplify the welfare gains by around 20%-25%.
"Measuring Imperfect Competition in Product and Labor Markets. An Empirical Analysis using Firm-level Production Data" [Download PDF] [Slides] (with Darío Tortarolo) (New version coming soon)
We disentangle the extent of imperfect competition in product and labor markets using plant-level data. We derive a formula for the ratio between markups and markdowns assuming cost-minimizing firms that face upward-sloping labor supply and downward-sloping product demand curves. We then separate this combined measure of market power by estimating firm-level labor supply elasticities instrumenting wages with intermediate inputs. Our results suggest that both markets exhibit imperfect competition, but the variation is mainly driven by markups. Additionally, we estimate the relative gains of removing market power dispersion on allocative efficiency, finding that markups are more important on TFP than markdowns.
Selected Work in Progress