CEDE

2018

Self-Selection of Motivated Agents into the German Police Force

Lugar ML-514
Conferencista Guido Friebel, Goethe University Frankfurt, CEPR, and IZA
Coautores Michael Kosfeld (Goethe University Frankfurt, CEPR, CESifo, and IZA) and Gerd Thielmann (Deutsche Hochschule der Polizei)
Abstract We conduct experimental games with police applicants in Germany to investigate whether intrinsically motivated agents self-select into this type of public service. Our focus is on trustworthiness and the willingness to enforce norms of cooperation as key dimensions of intrinsic motivation in the police context. We  find that police applicants are more trustworthy than non-applicants, i.e., they return higher shares as second-movers in a trust game. Furthermore, they invest more in rewards and punishment when they can enforce cooperation as a third party. Our results provide clear evidence for self-selection of motivated agents into the German police force, documenting an important mechanism that influences the match between jobs and agents in public service.
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Fecha 24/10/2018
Hora 12:30 a 1:45 pm.

Social Norms and Dishonesty across Societies

Lugar W-102
Conferencista Diego Aycinena, Universidad del Rosario
Coautores Benjamin Beranek (University of Nottingham), Lucas Rentschler (Utah State University), Jonathan Schulz (Harvard University)
Abstract Social norms are a fundamental underpinning of institutions. Many studies have examined the role of social norms in explaining apparently puzzling behavior. In this study, we investigate the role of injunctive social norms (or normative expectations) regarding cheating behavior in the laboratory across societies. Specifically, we explore how the intensive margin of norm violations (regarding lying) relate to different actions (dishonesty) and differ across societies. We use experimental methods to examine injunctive social norms (subjects’ shared beliefs on the social acceptability of behavior) and descriptive social norms (subjects’ beliefs about others’ behavior). Using the individuals’ perception of the injunctive norms, we classify individuals according to into different types of normative systems and explore the implication of differences in normative perception types on behavior. We run these tasks across different countries (Guatemala, Turkey, Sweden, UK, US, China, India, Colombia and Kenya) that differ according to widely used macro-level indicators such as the Corruption Perception Index, Rule of Law Index, etc., and vary along complex kinship systems.
Fecha 23/10/2018
Hora 12:30 a 1:45 pm.

“Unit Commitment, Opportunity Costs and Market Power in a Structural Model of Competition in the Colombian Electricity Spot Market”

Lugar W-102
Conferencista Álvaro J. Riascos, Universidad de los Andes
Coautores Juan David Martin (Quantil) y Juan Esteban Carranza (Banco de la República)
Abstract We formulate and estimate a structural complex-bidding auction model for the Colombian electricity market. We investigate whether the current dispatch mechanism for electricity generation in the Colombian market, a centralized unit commitment mechanism introduced by Resolution 51 (2009), led to a reduction in the aggregate cost of energy compared the a counterfactual of self unit commitment that prevailed before 2009. Our model accounts for the presence of complex bids, multi-plant firms, and the dynamic incentives of both hydro and thermal generators. Using a bootstrapping approach, we estimate the primitive parameters of the bidders' marginal cost function. These estimates are used to simulate a counterfactual experiment in which we evaluate the social gains of a centralized unit commitment dispatch by simulating the prices and outputs between August, 2011 and December, 2012, assuming that the market mechanism was the self unit commitment format without complex bids. Our findings show that, although the new dispatch mechanism is on average associated with higher bid markups, the total cost of the energy produced was substantially lower in the new mechanism. As a by product, we compare estimated marginal and opportunity costs from our model with engineering marginal costs, a standard methodology in the non-economic literature. We find that engineering costs substantially under estimate the marginal and opportunity costs of our structural model.
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Fecha 16/10/2018
Hora 12:30 a 1:45 pm.

Making Sense of Piketty

Lugar W-102
Conferencista Hernando Zuleta, Universidad de los Andes
Coautores Andrés Álvarez y Camilo Gómez (Universidad de los Andes)
Fecha 09/10/2018
Hora 12:30 a 1:45 pm.

The Aggregate And Distributional Effects Of Urban Transit Infrastructure: Evidence From Bogotá’s TransMilenio

Lugar W-101
Conferencista Nick Tsivanidis, Dartmouth College
Abstract How large are the benefits to improving transit in cities, and how are the gains shared between low- and high-skilled workers? This paper uses detailed tract-level data to analyze the construction of the world's largest Bus Rapid Transit (BRT) system–TransMilenio–in Bogotá, Colombia. First, I build a quantitative general equilibrium model of a city where low- and high-skill workers sort over where to live, where to work, and whether or not to own a car. Second, I develop a new reduced form methodology derived from general equilibrium theory to evaluate the effects of transit infrastructure based on “commuter market access”, and use it to empirically assess TransMilenio's impact on city structure. Third, I structurally estimate the model and quantify the effects of the system. I find that while the system caused increases in welfare and output larger than its cost, the gains accrued slightly more to high-skilled workers. The incidence of public transit across skill-groups is determined not only by who uses it most, but also by how easily individuals substitute between commutes, whether the system connects workers with employment opportunities, and equilibrium adjustment of housing and labor markets. Finally, adjusting zoning regulations to allow increased building densities in affected locations would have led to higher welfare gains. This underscores the benefits to cities from pursuing a unified transit and land use policy.
Fecha 04/10/2018
Hora 12:30 a 1:45 pm.

Campaign Finance Policies when Contributions Mobilize Voters But Harm Public Projects.

Lugar W-102
Conferencista Oskar Nupia, Facultad de Economía, Universidad de los Andes
Coautor Francisco Eslava (University of British Columbia)
Abstract We build a political competition model with rational expressive citizens and contract-induced campaign contributors to analyze the welfare effects of campaign finance reforms. In this context, campaign spending positively affect citizens' welfare by reducing their voting cost and allowing them to express their political ideology through voting, and negatively affect their welfare by reducing the quality of public projects. This trade-off is different to the standard one analyzed in previous literature. We find that unrestricted campaign contributions are above the efficient level, but that banning contributions is not Pareto improving. Furthermore, taxing or subsidizing contributions while allowing for unrestricted contributions are not Pareto improving policies. Nevertheless, limiting campaign contributions or banning contributions and subsidizing campaigns are Pareto improving policies.
Fecha 25/09/2018
Hora 12:30 a 1:45 pm.

Project Selection and Strategic Information Disclosure

Lugar W-102
Conferencista Guillem Roig, Universidad del Rosario
Coautor Nisvan Erkal (University of Melbourne)
Abstract We consider a research competition model in which two asymmetric firms compete for two risky research paths. We study firms' incentives to disclose research outcomes in a model with private information and private learning. In the model, firms have opposing incentives to disclose their private information. One the one hand, information withholding helps to monopolize a research path, on the other, disclosure of information works as a signaling device. When information is disclosed, the learning process of the rival changes and he may abandon research earlier. An equilibrium where firms diversify and start with different research paths, is characterized with more disclosure of negative results than in a situation where firms cluster with the same research path. Even if diversification generates an inefficient allocation of resources, it incentivizes information disclosure, and if the arrival rate of information is slow, an equilibrium with diversification generates larger welfare.
Fecha 13/09/2018
Hora 12:30 a 1:45 pm.

The role of nonlinear pricing and resale price maintenance on nominal price stability

Lugar W-102
Conferencista Jorge Florez Acosta, Universidad del Rosario
Abstract This paper empirically examines the role of nonlinear contracts between manufacturers and retail stores, and Resale Price Maintenance (RPM) on nominal price stability. It is widely accepted in the literature that the incomplete transmission of costs shocks into retail prices is explained by the existence of markup adjustment and price adjustment costs. The vertical conduct of the industry and the existence of vertical restraints such as RPM might introduce further price stickiness or reinforce it. I present a structural model of vertical relations between manufacturers and retailers allowing for nonlinear contracts and vertical restraints, and accounting explicitly for retail price rigidity by including fixed costs of price adjustment in retailer's profit function. Using micro data on sales of ready-to-eat breakfast cereals from a large supermarket  chain in Chicago, I estimate demand, retrieve upstream and downstream markups, and compute bounds of retail price adjustment costs under alternative vertical conducts. Results show that the total costs the retailer bears for adjusting prices of its products in a year lie between 1.6\% and 3\% of its total revenue, on average. In line with the theory, my model predicts larger upper bounds for adjustment costs under resale price maintenance than under simple linear pricing.
Fecha 11/09/2018
Hora 12:30 a 1:45 pm.

Uneven gains: a dynamic general equilibrium assessment of the US tax cuts on capital income

Lugar W-102
Conferencista JOliver Pardo, Pontificia Universidad Javeriana
Abstract This paper presents a dynamic general equilibrium model with heterogeneous households to assess the effect on welfare, distribution and economic performance of the US 2017 tax cuts on capital income. The simulation suggests that the cuts will lead to increases in investment, wages and output, although the welfare gains are quite unevenly distributed across households. Investment increases by 4.7% in the long run, leading to a 1.5% increase in the steady-state wages and a 1.9% increase in the steady-state output. However, there is a drop in tax revenue equivalent to 0.5% of the baseline GDP.  Furthermore, the poorest households are going to be worse off unless the expending cuts necessary to balance the government budget are appropriately targeted. Welfare gains, aggregated across the lifetimes of all households, are equivalent to 11% of the baseline GDP.
Fecha 06/09/2018
Hora 12:30 a 1:45 pm.

Ethical Voting: Theory and Experiment

Lugar W-102
Conferencista José-Alberto Guerra, Universidad de los Andes
Coautores Boris Ginzburg (Universidad Carlos III de Madrid); Warn N. Lekfuangfu (Chulalongkorn University and CEP, London School of Economics)
Abstract Model the problem of a committee who needs to vote on decisions where members receive a private benefit from voting for an ethical alternative, regardless of whether it is adopted, and face a cost if the ethical alternative wins the vote. We investigate how the probability that the agent is pivotal affects equilibrium behaviour under different voting rules and committee sizes. If members have different depths of reasoning, institutions that reduce pivotality of each member, increase the number of votes for the ethical alternative. A laboratory experiment, within a charitable donation framing, confirms key theoretical results and uncovers a high proportion of strategically naive subjects.
Fecha 04/09/2018
Hora 12:30 a 1:45 pm.

"The Impact of Political Killings on Democracy and Governance: Evidence from Colombia”

Lugar W-102
Conferencista Ana Arjona, Universidad de los Andes
Coautores Mario Chacón (New York University Abu Dhabi) y Laura García (Northwestern University)
Fecha 30/08/2018
Hora 12:30 a 1:45 pm.

Consumers' Costly Responses to Product-Harm Crises

Lugar W-102
Conferencista Rosa Ferrer, Universita Pompeu Fabra and Barcelona GSE
Coautor Helena Perrone (Mannheim University)
Abstract Exploiting a major food safety crisis, we estimate a full demand model for the unsafe product and its substitutes and recover consumers' preference parameters. Counterfactual exercises quantify the relevance of different mechanisms \textendash changes in safety perceptions, idiosyncratic tastes, nutritional characteristics, and prices\textendash driving consumers' response.
We find that consumers' reaction is limited by their taste for the product and its nutritional characteristics. Due to the costs associated with switching away from the affected product, the decline in demand following a product-harm crisis tends to understate the true weight of such events in consumers' utility. Indeed, we find that a large fraction of consumers are unresponsive to the crisis even when they significantly downgrade their product safety perception. For an accurate assessment of the crisis, managerial strategies should therefore account for how different demand drivers bind consumers' substitution patterns.
Fecha 28/08/2018
Hora 12:30 a 1:45 pm.

The effect of drone strikes in Pakistan on terrorism and anti-US sentiment

Lugar W-102
Conferencista Michael Jetter, University of Western Australia; IZA; CESifo
Coautor Rafat Mahmood (University of Western Australia and Pakistan Institute of Development Economics)
Abstract This paper analyzes the consequences of the 425 drone strikes the US has conducted in Pakistan from 2006 – 2016. The existing literature provides arguments both in favor of and against the use of drones in combatting terrorism: On the one hand, drones are lauded for being a low-risk, affordable option that has killed key terrorist leaders and destroyed their communication channels. On the other hand, the civilian casualties termed as collateral damage are suggested to increase trauma in the civilian population, thereby facilitating the recruitment of prospective terrorists and inciting further terrorist attacks. We aim to isolate the causal effect of drone strikes on subsequent terrorism and anti-US sentiment.
To do so, we employ an instrumental variable strategy using maximum wind gust as an instrument which substantially affects the employability and effectiveness of drones, but is otherwise orthogonal to the terrorists’ actions. Data on drone strikes and terrorism are obtained from the Bureau of Investigative Journalism (TBIJ) and the Global Terrorism Database (GTD), while data from Google trends and a leading Pakistani newspaper, The News, are used to capture radicalization and Pakistanis’ attitudes toward the US. Our results suggest that maximum wind gust provides a powerful instrument in the first stage, predicting the day-to-day use of drone strikes by the US. Second-stage results produce a positive and statistically significant coefficient in predicting terror attacks in the upcoming weeks, suggesting that drone strikes encourage terrorism. The corresponding magnitudes are sizeable. Finally, the data from Google trends and The News suggest that US drone strikes are increasing radicalization and anti-US sentiment in Pakistan.
Fecha 23/08/2018
Hora 12:30 a 1:45 pm.

When diversification clashes with the reinforcement heuristic: an experimental investigation

Lugar W-102
Conferencista JSantiago-Ignacio Sautua, Universidad del Rosario
Abstract I experimentally investigate diversification between two simple gambles. When subjects lack information about previous outcomes, a vast majority display a preference for diversification. By contrast, only a minority diversify after learning that one of the gambles has experienced better outcomes than the other. Subjects' posterior beliefs about winning probabilities affect diversification in this class of situations. However, most of the subjects who do not diversify tend to "chase" the gamble with better realizations, regardless of their beliefs. This behavior is consistent with subjects following a naive reinforcement heuristic. The findings are relevant for interventions intended to improve household financial outcomes.
Fecha 21/08/2018
Hora 12:30 a 1:45 pm.

Birth rates, factor shares and growth

Lugar W-102
Conferencista Andrés Álvarez, Universidad de los Andes
Coautores Camilo Gómez y Hernando Zuleta (Universidad de los Andes)
Fecha 14/08/2018
Hora 12:30 a 1:45 pm.

Optimal Short-Termism

Lugar W-102
Conferencista Alejandro Rivera, University of Texas at Dallas
Coautores Dirk Hackbart (Boston University) y Tak Wang (SUFE)
Abstract This paper studies incentives in a dynamic contracting framework of a levered firm. In particular, the manager selects long-term and short-term efforts, while shareholders choose initially optimal leverage and ex-post optimal default policies. There are three results. First, shareholders trade off the benefits of short-termism (current cash flows) against the benefits of higher growth  from long-term effort (future cash flows), but because shareholders only split the latter with bondholders, they find short-termism ex-post optimal. Second, bright (grim) growth prospects imply lower (higher) optimal levels of short-termism. Third, the endogenous default threshold rises with the  substitutability of tasks and, for a positive correlation of shocks, the endogenous default threshold is hump-shaped in the volatility of permanent shocks, but increases monotonically with the volatility of transitory shocks. Finally, we quantify agency  costs of short-term and long-term effort, cost of short-termism, effects of investor time horizons, credit spreads, and risk-shifting.
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Fecha 09/08/2018
Hora 12:30 a 1:45 pm.

"Facts, Alternative Facts, and Fact Checking in Times of Post-Truth Politics"

Lugar W-102
Conferencista Oscar David Barrera Rodriguez, Paris School of Economics
Coautores Sergei Guriev (Sciences Po), Emeric Henry (Sciences Po), and Ekaterina Zhuravskaya (Paris School of Economics)
Abstract How persuasive are “alternative facts,” i.e., misleading or outright false statements by populist politicians, in convincing voters? How effective is fact checking in countervailing the alternative facts? We conduct a randomized online experiment to address these questions in the context of the 2017 French presidential election campaign. Marine Le Pen (MLP), the extreme-right candidate who reached the runoff, regularly used misleading arguments in support of her policy proposals, to which mainstream media responded with systematic fact checking. We expose randomly selected subgroups of a sample of 2480 voting-age French to quotes from MLP containing misleading information about immigration and/or to facts from official sources. We find that alternative facts are highly persuasive: voters exposed to MLP rhetoric move their policy conclusions and voting intensions toward MLP. Fact checking does nothing to undo these effects despite improving factual knowledge of voters. In contrast, without fact-checking, exposure to MLP’s quotes moves posteriors on facts toward more extreme views away from the truth. Being exposed only to official facts increases political support for MLP while moving factual knowledge toward the truth.
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Fecha 29/05/2018
Hora 12:30 a 1:45 pm.

"Can Wealth Taxation Work in Developing Countries? Quasi-Experimental Evidence from Colombia"

Lugar W-102
Conferencista Juliana Londoño, UC Berkeley
Coautor Javier Avila (DIAN)
Abstract Countries considering using progressive wealth taxes to improve tax collection and curb rising inequality face enforcement challenges due to (legal) avoidance and (illegal) evasion responses by wealthy individuals---difficulties which are likely to be more pervasive in contexts with weak enforcement capacity. We study responses to wealth taxes and wealth tax enforcement using individual-level data from personal income and wealth tax returns in Colombia in 1993--2016 linked with microdata from the leaked ``Panama Papers." First, we exploit quasi-experimental variation in exposure to wealth taxes introduced by tax reforms and notches in the wealth tax schedule to estimate elasticities of reported wealth with respect to the net-of-tax rate. We find these elasticities are large and driven by misreporting items subject to less third-party reporting. Second, we find that increases in wealth taxes have triggered offshore tax evasion, with the wealthiest taxfilers obscuring their assets through offshore structures in neighboring tax haven Panama. Third, we study evaders’ responses to a tax amnesty that took place 2015-17. Evaders who voluntarily disclosed hidden wealth---and thus admitted to prior noncompliance---are among the wealthiest taxfilers in Colombia, and almost all of their fortune was concealed abroad. Halfway through the amnesty program, news of the Panama Papers leak broke and further encouraged evaders to disclose (at least part of) their hidden wealth. Finally, the amnesty program raised tax revenues from the wealthiest taxfilers and restored tax progressivity at the top of the distribution.
Fecha 22/05/2018
Hora 12:30 a 1:45 pm.

Using Exchange Rates to Estimate Production Functions: Evidence from Colombia

Lugar W-102
Conferencista Nicolás de Roux, Universidad de los Andes
Coautores Marcela Eslava (Universidad de los Andes), Santiago Franco (Universidad de los Andes) y Eric Verhoogen (Columbia University)
Abstract This paper develops an instrumental-variables methodology for estimating production-function coefficients at the micro level using exchange rates as a source of exogenous variation in input prices. Prices on individual inputs and outputs, in conjunction with well-known results from index theory, are used to construct firm-specific CES price deflators for sales and input expenditures. The use of such deflators allows us to deal also with common biases from unobserved input and output prices and endogenous unobserved quality. We implement our approach using rich data from the Colombian manufacturing census, which includes information on prices and physical quantities of all outputs and inputs of firms, and customs records on all import and export transactions of Colombian firms. Preliminary results indicate that exchange-rate movements in source countries generate sufficient within-firm variation in input usage to estimate production functions of Colombian firms, and that our estimates of productivity differ from those of proxy-variable methods currently dominant in the literature in meaningful ways.
Fecha 17/05/2018
Hora 12:30 a 1:45 pm.

Impactos de la estrategia nacional de atención a la primera infancia “De Cero a Siempre” sobre el desarrollo de los niños

Lugar W-102
Conferencista Raquel Bernal, Universidad de los Andes
Coautor Sara María Ramírez, (Ministerio de Hacienda y Crédito Público)
Abstract En este estudio se presentan los resultados de impacto de la expansión gradual de la estrategia nacional de atención integral a la primera infancia “De Cero a Siempre” (DCAS) que tuvo lugar entre 2011 y 2013 sobre los niños y niñas elegibles entre los 0 y 5 años de edad en Colombia. Con este objetivo se utiliza una metodología de evaluación cuasi experimental con base en datos secundarios disponibles en la Encuesta Longitudinal Colombiana de la Universidad de los Andes. La pregunta específica que contesta este estudio es si el aumento en la disponibilidad de cupos de atención integral a la primera infancia que ocurrió a partir de 2011 como resultado del lanzamiento de DCAS, tuvo efectos positivos sobre el desarrollo físico, cognitivo y socioemocional de los niños elegibles entre los 0 y 5 años de edad. La estrategia de identificación se basa en una metodología de diferencias en diferencias que explota la variación de oferta de cupos de atención integral a la primera infancia entre municipios, y la variación de esta oferta de cupos integrales entre diferentes de cohortes de niños en el mismo municipio. Los resultados indican un efecto positivo y de magnitud considerable sobre lenguaje receptivo en 2013, es decir inmediatamente después de la expansión de DCAS. De otra parte, no se observan efectos robustos sobre ninguna dimensión del desarrollo en 2016, 5 años después de iniciada la expansión.
Fecha 15/05/2018
Hora 12:30 a 1:45 pm.

Dancing with the Stars: Innovation Through Interactions

Lugar W-102
Conferencista Santiago Caicedo , Universidad de los Andes
Coautores Ufuk Akcigit (University of Chicago), Ernest Miguelez (Université de Bordeaux),  Stefanie Stantcheva (Harvard) and  Valerio Sterzi  (Université de Bordeaux)
Abstract An inventor's own knowledge is a key input in the innovation process. This knowledge can be built by interacting with and learning from others. This paper uses a new large-scale panel dataset on European inventors matched to their employers and patents. We document key empirical facts on inventors' productivity over the life cycle, inventors' research teams, and interactions with other inventors. Among others, most patents are the result of collaborative work. Interactions with better inventors are very strongly correlated with higher subsequent productivity. These facts motivate the main ingredients of our new innovation-led endogenous growth model, in which innovations are produced by heterogeneous research teams of inventors using inventor knowledge. The evolution of an inventor's knowledge is explained through the lens of a diffusion model in which inventors can learn in two ways: By interacting with others at an endogenously chosen rate; and from an external, age-dependent source that captures alternative learning channels, such as learning-by-doing. Thus, our knowledge diffusion model nests inside the innovation-based endogenous growth model. We estimate the model, which fits the data very closely, and use it to perform several policy exercises, such as quantifying the large importance of interactions for growth, studying the effects of reducing interaction costs (e.g., through IT or infrastructure), and comparing the learning and innovation processes of different countries.
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Fecha 10/05/2018
Hora 12:30 a 1:45 pm.

Expropriation Risk, Misallocation and Aggregate Productivity

Lugar W-102
Conferencista Jose Ignacio López - Universidad de Los Andes
Coautor Virginia Olivella, Banque de France
Abstract We propose a general equilibrium model featuring heterogeneous firms and a government that is both unable to commit and relatively more impatient than firms. We find that expropriation risk is capable of endogenously generating misallocation of resources across firms when productivity shocks are persistent, with firms in the good states being affected the most by the contracting frictions, thus leading to losses in aggregate output and total factor productivity proportional to the wedge in the discount factor of the government and the private sector in the long run stationary equilibrium.
Fecha 08/05/2018
Hora 12:30 a 1:45 pm.

On the Geography of Global Value Chains

Lugar W-102
Conferencista Pol Antras, Harvard University
Coautor Alonso de Gortari, Harvard University
Abstract This paper develops a multi-stage general-equilibrium model of global value chains (GVCs) and studies the specialization of countries within GVCs in a world with barriers to international trade. With costly trade, the optimal location of production of a given stage in a GVC is not only a function of the marginal cost at which that stage can be produced in a given country, but is also shaped by the proximity of that location to the precedent and the subsequent desired locations of production. We show that, other things equal, it is optimal to locate relatively downstream stages of production in relatively central locations. We also develop and estimate a tractable, quantifiable version of our model that illustrates how changes in trade costs affect the extent to which various countries participate in domestic, regional or global value chains, and traces the real income consequences of these changes.
Fecha 03/05/2018
Hora 12:30 a 1:45 pm.

Workplace incentives under imperfect information: An empirical study

Lugar W-102
Conferencista Miguel Martínez-Carrasco, Universidad de los Andes
Coautor Francesco Amodio (McGill University)
Abstract This paper studies how unobserved heterogeneity affects the response to incentives at the workplace. We develop a simple principal-agent model with asymmetric information over input quality and worker type, and test the model pre- dictions using personnel data from a Peruvian egg production plant. Exploiting a salient change in the worker salary structure, we show that heterogeneity along both margins of input quality and worker type significantly affects workers’ effort choice differentially after the implementation of the new incentive regime. We also find evidence that the change triggers learning among peers over the shape of the production function. Our study and results highlight how the presence of information asymmetries and imperfections in general affects the extent to which monetary incentives at the workplace shape workers’ effort choice and increase firm profits.
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Fecha 24/04/2018
Hora 12:30 a 1:45 pm.

Job migration in a rivalry setting

Lugar W-102
Conferencista Santiago Saavedra, Universidad del Rosario
Coautor Robert Fletcher, Stanford University
Abstract The importance of social networks in job search and migration have been well documented. However, spreading information too widely throughout networks when opportunities arise can easily lead to tragedy of the commons { too many people depleting a limited opportunity can mean no one benefits in the end. Hence, despite the generally positive value of large social networks, we should expect strategic sharing of information within networks. To better understand this, we study the co-migration decisions of social connections through the movements of gold miners in Colombia. Using this data, we document three facts that are nicely interpretable with a model of referrals and scarce resources. First, inviting social connections comes at a cost { inviting too many friends reduces production. Second, because of this, more productive miners choose to work with fewer social connections. Finally, the connections that miners are willing to invite are heavily selected; miners on average invite productive over non-productive peers.
Fecha 19/04/2018
Hora 12:30 a 1:45 pm.

Corruption, Customs Reform and Firm Growth: Quasi-Experimental Evidence from Colombia

Lugar W-102
Conferencista Rachid Laajaj, Universidad delos Andes
Coautores Marcela Eslava, Universidad delos Andes, Tidiane Kinda, International Monetary Fund.
Abstract Abstract Customs are often prone to corruption because it concentrates a lot of discretionary power in the hand of customs officers who take decisions with high economic stakes for the firms, providing an opportunity for customs officers to extract a rent. Communication technologies offer the possibility to limit this discretionary power by reducing direct interactions between firms and customs officers. Combining firm level panel data on about 6,000 manufacturing firms with custom level data, we assess the effects on firms' growth of a computerization of import transactions that occurred sequentially in the 26 Colombian customs between 2000 and 2005. We apply a triple difference strategy that makes use of the variation between customs, time and the firms' exposure to the reform, based on whether it was an importing firm before it started. We find large effects of the computerization of imports on the growth of importing firms' inputs, investments and value added. We also provide evidence of a large increase of imports declared, taxes collected at customs, and a reduction in corruption cases following the custom reform.
Fecha 17/04/2018
Hora 12:30 a 1:45 pm.

Using Two-Part Contracts to Identify Complementarities Across Tasks: An Application to Family Doctors

Lugar W-102
Conferencista Paul Rodríguez, Universidad del Rosario
Coautor Marcos Vera-Hernández, UCL
Abstract Whether tasks are cost complement or subsitutes is crucial for the optimal design and ultimate success of any pay-for-perfomance scheme. We propose an empirical test for determining if tasks are cost complements or substitutes. The test requires that the reward scheme is piecewise linear, and that that there are changes over time on the rewards of some tasks. However, the reward scheme does not need to vary across agents, making it applicable to nationwide payfor- performance programmes. The test is based on the insensitivity of effort on a particular task to variations in the price of other tasks for agents who are bunched at the kinks. We apply our new test to The Quality and Outcomes Framework in the UK, which is the largest payfor- performance programme for primary care services in the world. We find that seven tasks are complements and one is substitute. Overall, our results indicate that pay-for-performance schemes should be successful because increasing the effort exerted in most tasks decreases the marginal cost of effort on other tasks, and consequently effort diversion does not take place. The results also has implications on how to design an efficient primary care system: one based on family doctors rather than specialists groups together tasks, which are complements in the cost function, and hence improves efficiency.
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Fecha 12/04/2018
Hora 12:30 a 1:45 pm.

Effects of Future Pension Benefits on Pre-retirement Labor Supply: Evidence from Chile

Lugar W-102
Conferencista Oscar Becerra, Universidad de los Andes
Abstract I estimate the effect of future pension benefits on pre-retirement labor supply for a representative sample of Chilean workers. Using non-linear patterns in pension benefit formulas and a reform that changed non-contributory pensions, I estimate the effect of pension accrual and expected pension wealth on labor force and contributory-sector participation, labor earnings, and hours worked. I find that the main effect is related to the impact of pension accrual on the probability to contribute to the pension system. The effect is heterogeneous, and is concentrated among middle-age workers, among low-skilled workers, among workers with no financial assets, and among workers with higher levels of financial literacy.
Fecha 10/04/2018
Hora 12:30 a 1:45 pm.

Mechanism Design meets Development: Selective Trials for Technology Diffusion

Lugar W-102
Conferencista Pascaline Dupas, Stanford University, Senior Fellow, Stanford Institute for Economic Policy Research
Coautor Sylvain Chassang, Catlan Reardon and Erik Snowberg
Abstract Many technologies require local experimentation before individuals can make successful adoption and usage decisions. Since information is a public good, technology adoption subsidies are an important component of development policy. We ask whether it is possible to enhance technology adoption schemes by targeting the most appropriate experimenters. Building on Chassang et al. (AER 2012), we design and implement a set of field experiments that let us study the building blocks needed for successful targeting: Are people heterogeneous in their ability as experimenters? Is this information known, and by whom? Can it be elicited and how? Can it be used to enhance the effectiveness of subsidies?
Fecha 05/04/2018
Hora 12:30 a 1:45 pm.

Social networks and entrepreneurship. Evidence from a historical episode of industrialization

Lugar W-102
Conferencista Javier Mejía, Universidad de los Andes
Abstract This paper explores the relationship between social networks and entrepreneurship by constructing a dynamic social network from archival records. The network corresponds to the elite of a society in transition to modernity, characterized by difficult geographical conditions, market failures, and weak state capacity, as in late 19th- and early 20th-century Antioquia (Colombia). With these data, I estimate how the decision to found industrial firms related to the position of individuals in the social network. I find that individuals more important bridging the network (i.e. with higher betweenness centrality) were more involved in industrial entrepreneurship. However, I do not find individuals with a denser network to be more involved in this type of activity. The rationale of these results is that industrial entrepreneurship was a highly-complex activity that required a wide variety of complementary resources. Networks operated as substitutes of markets in the acquisition of these resources. Thus, individuals with network positions that favored the combination of a broad set of resources had a comparative advantage in industrial entrepreneurship. I run several tests to prove this rationale.
Fecha 03/04/2018
Hora 12:30 a 1:45 pm.

Basis Risk & Willingness to Pay for a Weather-Based Insurance: Experimental Games among Colombian Coffee Growers.

Lugar W-102
Conferencista Santiago Gómez Cardona, Universidad de los Andes
Coautores Andrés Moya, (Universidad de los Andes). Stephen Boucher, (Universidad de California, Davis)
Abstract The threat of climate change has make the need for better instruments to deal with crop variability a growing need. Weather insurance, particularly in the form of Index Insurance has been gaining increasing attention. While it has many advantages (i.e. lower cost, it is does not suffer from moral hazard), its biggest drawbacks are related with a non-perfect correlation of the index and crop yields. The possible yield losses that the farmers can suffer and that are not covered by insurance are known as basis risk. There are two types of basis risks. One coming from the presence of idiosyncratic risks that face the farmers and that are not covered by the Index Insurance (I). The other, coming for a not perfect correlation of the measures of the weather expressed by the index and the actual expression of the weather at the farm level (II). We design and apply an economics experiment among 403 coffee growers in 23 different municipalities in Colombia, during November-December 2017, to test the effect that these two different types of basis risks have on insurance take-up. Our results show that the basis risk that is produced by not perfect correlation of the index with the actual weather (II) do decrease the willingness to pay for the insurance, while the basis risk derived from the risk structure that farmers face (I) does not have a discernible effect on the willingness to access insurance for the full sample. Nonetheless these last type of basis risk (I) do have a positive effect on take-up for people with low education levels, while it is no present for high education levels participants. It also seem that the effects are particularly concentrated in women. Whenever they are significant the effect follows the direction that expected utility theory predicts.
Fecha 22/03/2018
Hora 12:30 a 1:45 pm.

Blessing a Curse? Institutional Reform and Resource Booms in Colombia

Lugar W-102
Conferencista Jorge Gallego, Universidad del Rosario
Coautores Stanislao Maldonado (Universidad del Rosario) y Lorena Trujillo (DNP)
Abstract Is it possible to revert the resource curse through institutional reform? Evidence suggests that there is a negative relationship between abundance of natural resources and economic growth, political stability, democracy, and peace. However, evidence illustrating how institutional reform can revert this situation is scarce. In this paper, we exploit an institutional reform that took place in Colombia in 2011. We evaluate the effects of the reform to the royalties system, that modified the allocation rule of these rents but also introduced important changes in terms of control and accountability, on the living standards of Colombian households. We instrument municipality-level allocations of royalties using international variations in the price of oil, and we find that the reform had important effects on several household welfare indicators. We find positive impacts on important dimensions, such as poverty, income, employment, housing conditions, health, and education, among others. Results are mixed or null in other areas, such as formality or employment in the service sector. We test for different channels explaining these effects, which include theories of state capacity, competition for resources, and increased control and accountability. Our evidence supports the state capacity mechanism.
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Fecha 15/03/2018
Hora 12:30 a 1:45 pm.

“Telling schools apart: the role of preferences, restrictions, and the ability to differentiate in school choices”.

Lugar W-102
Conferencista Diego Amador, Universidad de los Andes
Coautores Nicolás Grau (Universidad de Chile), Juan-Andrés Castro (Universidad de Chile)
Abstract We specify and estimate a static model of elementary school choice that differentiates between preferences for academic quality, the ability to tell apart schools of different quality, and restrictions in terms of schools available to households. We estimate the model using a combination of administrative and survey data from Chile, which includes rich information on how parents compare the academic quality of schools.
We find evidence of a strong interaction of preferences and perceptions about quality in determining school choices and in explaining differentials in terms of the academic quality of schools attended by students of different socioeconomic backgrounds. The limitations in the ability of parents to compare schools that we estimate have important implications for market oriented educational systems, which rely on parents choices to improve quality through competition.
Fecha 13/03/2018
Hora 12:30 a 1:45 pm.

More than One Hundred Years of Improvements in Living Standards:  The Case of Colombia

Lugar W-102
Conferencista Adolfo Meisel-Roca, Central Bank of Colombia
Coautores Juliana Jaramillo-Echeverri  y María Teresa Ramírez-Giraldo, Central Bank of Colombia
Abstract We examine the long-term trends observed in the living standard of the Colombian population during the past one hundred years. We construct a historical index of human development for Colombia (HIHDC) for the 19th and 20th centuries by gender. We find that there were no major advances in living standards during the nineteenth century due to the stagnation of Colombia’s GDP per capita as a result of the lack of dynamism in exports. On the contrary, significant advances in all components of the HIHDC were seen in the twentieth century, especially those for women. During the first half of the century, improvements in the quality of life were mainly driven by a higher per capita income, while improvements after the 1950s were driven by greater public investment, for example, in education and health. Next, we analyze health achievements. We construct a new dataset using statistics reported by the Colombian government, which included annual information on the main diseases and causes of mortality during the period of 1916-2014 disaggregated by territorial units. The data show that the percentage of deaths from tuberculosis, pneumonia, and gastrointestinal diseases decreased significantly throughout the century. On the contrary, deaths caused by cancer and heart diseases have increased considerably in recent decades. Econometric results show that the decline in the total mortality rate and in the mortality rate for waterborne diseases was largely related with the expansion of aqueducts and sewerage services.
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Fecha 08/03/2018
Hora 12:30 a 1:45 pm.

Child Nutrition in Argentina and Colombia: does family structure play a role?

Lugar W-102
Conferencista María Muniagurria, Wisconsin-Madison, Profesora Visitante en Facultad de Economía, Universidad de los Andes
Coautora Beatriz Novak, El Colegio de México
Abstract Investments in child health result from decisions by parents, other family members, governments and other groups. Both family and community environments matter for child well-being and interventions have the potential of changing adulthood outcomes. Family environments differ in the quality and quantity of household resources, child-rearing inputs and attention from parents and other family members. The particular structure of a family affects all these dimensions.
Several studies have identified links between family structure and child nutrition in Latin American countries. However, their results are hard to compare – and in many cases contradictory- due to their particular characteristics.
The goal of this research is to provide new evidence on the existence of differences in nutritional outcomes by family structure in Latin America.
Using the Encuesta Longitudinal Colombiana de la Universidad de los Andes (ELCA) and building on our earlier work, our research aims at: (1) studying the determinants of young children’s nutritional status and evolution in Colombia, especially family structure and stability, (2) comparing the Colombian findings to the ones for Argentina.
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Fecha 06/03/2018
Hora 12:30 a 1:45 pm.

Una Medición de Desempeño Municipal para la inversión orientada a resultados

Lugar W-102
Conferencista Javier Perez Burgos, DNP
Coautores Natalie Gomez (DDDR-DNP) y Dalma Ariza (DDDR-DNP)
Abstract Después de 10 años de medición del Indice de Desempeño Integral-IDI, el Departamento Nacional de Planeación lanza una nueva Medición de Desempeño Municipal-MDM orientada a la evaluación de la descentralización mediante la gestión y los resultados de desarrollo de las Entidades Territoriales.
El IDI como primera medición de desempeño dejó lecciones importantes pero presentaba desafíos metodológicos  entre ellos baja calidad de la información por ser de auto-reporte, mezcla de metodologías de agregación, así como ausencia de indicadores de resultados esencial en una evaluación de la descentralización. La nueva medición reconoce la heterogeneidad del país en términos de capacidades iniciales de las ET, permite medir mejoras en el bienestar de la población como fin último de la gestión y la descentralización, y busca ser un primer instrumento para incentivar el "pago" por resultados de las ET.
Fecha 01/03/2018
Hora 12:30 a 1:45 pm.

“Hacia el Mercado de Capitales que Colombia necesita: Retos estructurales”

Lugar W-102
Conferencista Juan Pablo Córdoba Garcés, Bolsa de Valores de Colombia
Coautora Estefanía Molina Ungar, Bolsa de Valores de Colombia
Abstract Aunque no se puede desconocer la transformación que ha atravesado el mercado de capitales colombiano en las últimas dos décadas, su desarrollo futuro requiere superar una serie de retos estructurales. De lo contrario, existe el riesgo de que éste se estanque (como ha ocurrido en los últimos cinco años) o, incluso, que se marchite, dejando de cumplir adecuadamente el rol que le corresponde dentro de la economía. Este documento propone seis ejes de trabajo, que deberían servir como punto de partida para establecer una hoja de ruta para promover el desarrollo de este mercado: (1) definición de una visión de largo plazo; (2) estímulo al mercado de capitales como complemento al sector bancario tradicional; (3) estructura competitiva y de propiedad del sistema financiero; (4) competencia global; (5) competitividad tributaria; y (6) integración regional.
Fecha 27/02/2018
Hora 12:30 a 1:45 pm.

“Incertidumbre acerca de la política fiscal y ciclo económico”

Lugar W-102
Conferencista Hernán Rincón-Castro, Banco de la República
Coautora Martha Elena Delgado-Rojas, Universidad Nacional
Abstract In this paper I investigate the “little divergence” of late medieval and early modernEurope, focusing on the long run response of real wages to demographic changes.Through a quantitative analysis of the 14th-18th centuries series of real wages and population shocks in fourteen European cities, I find that in four north-western cities(Amsterdam, Antwerp, London, and Oxford) the urban real wages were detached from population before the Industrial Revolution, while, in the central and southern Europe wages had a moderate or negative response to population changes. In addition, I show that this different response dates back to the 16th century. I claim, that these two results support three possibly non alternative interpretations of the “little divergence”,either based on changes of fertility regimes, rural and urban labor organizations, or on the onset, in early modern north-western Europe, of non strictly Malthusian growth mechanisms.
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Fecha 26/01/2018
Hora 12:30 a 1:45 pm.

Origins of Europe’s North-South Divide: Population Changes, Real Wages and the ‘Little Divergence’ in Early Modern Europe

Lugar SD-715
Conferencista Mattia Fochesato, New York University Abu Dhabi, UAE
Abstract In this paper I investigate the “little divergence” of late medieval and early modernEurope, focusing on the long run response of real wages to demographic changes.Through a quantitative analysis of the 14th-18th centuries series of real wages and population shocks in fourteen European cities, I find that in four north-western cities(Amsterdam, Antwerp, London, and Oxford) the urban real wages were detached from population before the Industrial Revolution, while, in the central and southern Europe wages had a moderate or negative response to population changes. In addition, I show that this different response dates back to the 16th century. I claim, that these two results support three possibly non alternative interpretations of the “little divergence”,either based on changes of fertility regimes, rural and urban labor organizations, or on the onset, in early modern north-western Europe, of non strictly Malthusian growth mechanisms.
Fecha 26/01/2018
Hora 12:30 a 1:45 pm.

Peer Effects in After-School Programs. Experimental Evidence in El Salvador

Lugar W-102
Conferencista Lelys Dinarte, Universidad Católica de Chile
Abstract This paper provides experimental evidence of the overall impact of an after-school program on students’ outcomes, and of the role of having different levels of violent peers in that context. Participants were between 10-16 years old and enrolled in public schools in El Salvador. I find that the program reduced bad behavior reports by 0.17 standard deviations, school absenteeism by 23%, and increased school grades by 0.11-0.13 standard deviations. Changes in highly violent students mainly drove the results. Regarding group composition, results indicate that integrating students with different propensities for violence was better than segregating them. Moreover, there is an interaction between the group composition and individual baseline propensity for violence: the intervention can have unintended effects if highly violent students are segregated and treated separately from their less violent peers. Finally, I find positive social spillover effects for non-enrolled children exposed to treated students.
Fecha 25/01/2018
Hora 12:30 a 1:45 pm.

Targeted or Universal? Mobilizing Students Through School Vouchers

Lugar W-102
Conferencista Cristián Sánchez, University of Maryland
Abstract This paper studies how students and schools respond to tuition voucher policies, in a context in which both a universal voucher and a targeted voucher are used to subsidize enrollment. In particular, I investigate whether an increase in the universal voucher is more or less effective in increasing students' access to schools than an equally costly increase in the targeted voucher. To this end, I develop and estimate a structural model of demand and supply of schools for Chile's elementary education system, that accounts for private schools' decision to join the targeted voucher program, as well as for their decision on which level of tuition to charge. I find that no policy is economically superior to the other, but they do imply different responses by schools and students. Specifically, a higher universal voucher induces schools to lower their tuition; whereas a higher targeted voucher attracts more schools to join the targeted voucher program, thereby enlarging the set of schools that predominantly serve disadvantaged students. I also find that the majority of the students that switch schools under both policies, move to schools of higher quality. This is true for both disadvantaged and non-disadvantaged students. Finally, families' spending decreases under the universal voucher policy, which is a direct consequence of schools lowering their tuition.
Fecha 23/01/2018
Hora 12:30 a 1:45 pm.

Time-Varying Capital Intensities and the Hump-Shaped Evolution of Economic Activity in Manufacturing

Lugar W-102
Conferencista Luis Felipe Sáenz, University of Illinois
Abstract Manufacturing's share of employment is known to follow a hump-shaped pattern as economies structurally transform. Motivated by the observation that capital intensities in manufacturing increase over the development process, this paper examines whether such changes are important in accounting for the hump-shaped pattern in manufacturing employment shares as well as the decline in agriculture and the rise in services. It does this by putting forth a model of the structural transformation that allows for varying rates of technological rates, long-run Engel curves, international trade, as well as time-varying capital intensities. The model is calibrated to the experience of South Korea between 1970 and 2010 and the importance of these four factors for the structural transformation is analyzed. The main finding is that whereas heterogeneous rates of technological change, long-run Engel curves and international trade are important for accounting for various elements of the structural transformation, only time-varying capital intensities are critical for generating the hump-shaped pattern in manufacturing employment fairly close. Time-varying capital intensities are the additional "labor push" needed to explain the observed movement of labor out of manufacturing
Fecha 18/01/2018
Hora 12:30 a 1:45 pm.

Land Redistribution and Crop Choice: Evidence from Reform and Counter-Reform in Chile

Lugar W-102
Conferencista Nicolás A. Lillo Bustos, University of Warwick
Abstract This paper uses unique historical data on the Chilean land reform of the 1960s and 1970s to estimate the impact that redistribution had on land inequality and crop choice. The results show that land redistribution had a persistent negative effect on land inequality, and that areas that were treated with more reform increased their share of land cultivated with fruits, vegetables, and vineyards, and lowered the share of land destined to forest plantations. The fact that a military coup interrupted the reform process allows for the comparison of the effects of reform and counter-reform, which sheds light on the mechanisms through which redistribution operated. I find that land that was transferred to new owners drive the results for crop choice, but not those for land inequality.
Fecha 16/01/2018
Hora 12:30 a 1:45 pm.


end faq