Publications

Surviving Competition: Neighborhood Shops vs. Convenience Chains

Review of Economic Studies

REStud Online Appendix

IDB Working Paper (with Online Appendix)

Hundreds of millions of microenterprises in emerging economies face increased competition from the entry and expansion of large firms that offer similar products. This paper studies how one of the world's most prevalent microenterprises, neighborhood shops, confront competition from convenience chains (e.g., 7-Eleven) in Mexico. To address the endogeneity in time and location of chains' store openings, I pair two-way fixed effects with a novel instrument that, at the neighborhood level, shifts the profitability of chains but not of shops. An expansion from zero to the average number of chain stores in a neighborhood reduces the number of shops by 16%. Consistent with the theoretical framework, this reduction is not driven by an increase in shop exit but by a decrease in shop entry. Shops retain their sales of fresh products and 96% of their customers, but customers visit shops less often and spend less on non-fresh and packed goods. I present evidence consistent with shops surviving by exploiting comparative advantages stemming from being small and owner-operated, such as lower agency costs, building relationships with the community, and offering informal credit. 

Awards: Best Paper - Citibanamex Premio de Economia 2022

Grandmothers and the Gender Gap in the Mexican Labor Market 

Journal of Development Economics

This paper estimates the effect of childcare availability on parents' employment probability using the timing of death of grandmothers--the primary childcare providers in Mexico--as identifying variation. I use a triple-difference to disentangle the effect of coinhabiting grandmothers' deaths due to their impact on childcare from their effects due to alternative mechanisms. Through their impact on childcare availability, grandmothers' deaths reduce mothers' employment rate by 12 percentage points (27 percent) and do not affect fathers' employment rate. The negative effect on mothers' employment is smaller where public daycare is more available, or private daycare or schools are more affordable. 


Press Coverage: The Economist, Financial Times, VoxDev Podcast, VoxLACEA, El Financiero Bloomberg (Mexico), Reforma (Mexico), Il Post (Italy), El Norte (Mexico), Caracol Radio (Colombia), El Sol de la Laguna (Mexico), Primicias (Ecuador), El Pais (Uruguay) 

Awards: Honorable Mention - Citibanamex Premio de Economia 2018

Work in Progress

with Ameet Morjaria and Nemanja Antić

We develop and test a model of building relational contracts where the principal and agent need to solve task clarity and credibility problems. We model task clarity as the likelihood of the agent finding a productive action for the principal and show that it influences the agent’s propensity to fulfill promises, the usual notion of credibility. This is because improving task clarity increases the ease of replacing a relationship after a defection, making defection more tempting. We validate our model using administrative data from the Ethiopian floriculture industry. We show that: (i) task clarity problems are economically relevant and more severe for domestic firms, (ii) consistent with our theoretical results, exporters with higher task clarity are more likely to defect on relationships in response to positive shocks to the outside option, and (iii) the buyer and seller components of task clarity explain differences between foreign and domestic firms in credibility and overall success in relational contracts.
Previous Titles: Clarity and Credibility in Relationships: Evidence from Ethiopian Flower Exports; Relationship Building in Ethiopia’s Floriculture Industry

Early experimentation outcomes could play a determinant role in explaining the observed low take-up of productive technologies and knowledge. This paper overcomes the identification challenges of estimating a causal effect of early experimentation outcomes on long-run adoption by exploiting a novel application of treatment status assignment being as good as random in a local neighborhood of a cutoff based on sample constructions. The intuition is comparable to the one in the close elections and regression discontinuity literature. Leveraging data of hundreds of thousands of online chess players, I analyze the effect of the outcome of a player’s first “berserk” experience — a technology that increases the payoff but lowers the probability of receiving it — on her likelihood of using the technology in the future. Players with a negative first impression underutilize the technology in the future (20%), leading to accumulating fewer points, being less likely to achieve podium positions, and having lower overall tournament rankings compared to those with a positive first impression despite having similar win rates. These results showcase that adverse early experimentation outcomes can severely hinder the adoption of productive strategies and technologies in the long run.

with Juan Pablo Chauvin and Rafael Macedo

Accurate demographic data is critical for effective policy design, yet private costs may prevent individuals from truthfully reporting sensitive information. We study this asymmetric information market failure and its consequences in the context of a significant social challenge: child motherhood. Using administrative records from Brazil, Mexico, and the United States, alongside census data from 59 countries, we document systematic patterns of under-reporting, suggesting that child motherhood is significantly more prevalent than previously thought. Births to mothers aged 10-14 are missing from contemporary administrative records but appear in censuses conducted a decade later, with under-counting in birth registries reaching 20-30% in Brazil, Mexico, and the United States. We introduce a model where reporting decisions weigh instrumental benefits against age-dependent private costs, generating predictions that match observed patterns: truthful reporting increases sharply with the mother’s age, under-reporting of child-mother births decreases with time between data collection and childbirth, and retrospective census estimates generally yield more accurate birth counts than contemporary administrative records for this age group, but not for older mothers. The evidence points to social costs, rather than fear of legal consequences, as a key driver of under-reporting.