Eventos pasados | Universidad de los Andes

Seminario CEDE - Mateo Uribe-Castro

We study the impact of the Panama Canal on the development of Canadas manufacturing sector in the years from 1900 to 1939. Using newly digitized county-level data from the Census of Manufactures and a market-access approach, we exploit the plausibly exogenous nature of this historical episode to study how changes in transportation costs influence the location of economic activity and productivity dynamics. Our reduced-form estimates show that lowered shipping costs led to greater market integration of marginally productive Canadian counties with key markets both inside and outside of Canada. This development permitted the reallocation of production activity to places whose production levels had been inefficiently low before the Canal opened. A shift from the 25th to the 75th percentile in terms of gains in market access brought about by the opening of the Canal led to a 9% increase in manufacturing revenues and input expenditures. Productivity rose by 13%. These effects persist when general equilibrium effects are considered: the closure of the Canal in 1939 would have resulted in economic losses equivalent to 1.86% of GDP, chiefly as a result of the restriction of the countrys access to international markets. Altogether, these results suggest that the Canal substantially altered the economic geography of the Western Hemisphere in the first half of the twentieth century.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Felipe Lozano

Over a two-week span in December 2007 a massive spike of prescription opioids surged suddenly into retail pharmacies in 78 counties in five Southeastern U.S. states. These spike counties experienced an average increase in opioid deliveries of 313\% over baseline, with one Mississippi county experiencing a 1300% increase. The magnitude of this surge was over 3.4 billion morphine milligram equivalent units - more than 147 million standard doses. The pattern of facts available is consistent with the hypothesis that Colombian drug cartels became suddenly unable to launder large amounts of physical cash at the end of 2007 at a time when their capacity to supply eastern US heroin markets was failing and therefore used their excess physical cash to acquire prescription opioid products which could then be diverted to the illicit drug market in the US east of the Mississippi River. Importantly, any relative increase in prescription opioids (manufactured with very tight therapeutic windows) in the illicit market would be expected to displace heroin at least partially (manufactured with varying potency which cannot be known prior to consumption), implying the spike in diversion amounted to an unplanned harm-reduction shock for prior heroin or other non-prescription opioid users. We estimate novel difference-in-differences models of substance-specific opioid mortality, using counties west of the Mississippi River as controls, and the geographic distance to a spike county as the intensity of treatment. We find that in the two years following the shock, there were fewer deaths from heroin and all non-prescription opioid mortality in localities up to 200 miles (driving distance) from spike counties, with benefits becoming generally smaller and statistically insignificant beyond that point. We argue that these reductions can be directly attributed to the diversion and account for 448 lives saved in the spike counties vicinity per year, or nearly 30% of heroin deaths in those areas.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - CESED | Benjamin Lessing

If states strive to establish monopolies on the legitimate use of force, why is criminal governance---gang rule---over civilians so common and persistent, especially in urban zones within easy reach of state forces? How have the resulting duopolies of violence survived decades of aggressive policing? Why do drug-retailing gangs often govern without taxing their subjects at all? ``Market-for-Protection'' models of state formation and that assume competition among symmetric, would-be monopolists provide limited traction on these questions. Instead, I develop a public-goods model where state and criminal governance overlap, and in which each stands to benefit the other actor. I adapt Mcguire and Olsons (1996) model of stationary banditry by including a second bandit---the gang---and, in an extension, a drug market in which gang governance (and taxation) affect drug profits by winning (losing) residents' loyalty. Under some conditions, the state prefers criminal duopoly to Weberian monopoly: if gangs' relative costs of governance are sufficiently low, or if they can draw on illicit drug profits to finance governance. I analyze equilibria in which state repression of trafficking incentivizes gangs to channel drug profits into governance and reduce taxes on residents, indirectly benefiting the state enough that it prefers duopoly. Even if partially offset by the political costs to elected officials of criminal governance, these underlying fiscal benefits help explain the persistence of duopolies of violence over generations.

12:30 pm

Universidad de los Andes - W-102

Activo

Seminario CEDE - Walter Sosa Escudero

The paradox of progress is an empirical regularity that associates more education with larger income inequality. Two driving and competing factors behind this phenomenon are the convexity of the Mincer equation (that links wages and education) and the heterogeneity in the returns to education, as captured by quantile regressions. We propose a joint least-squares and quantile regression statistical framework to derive a decomposition to evaluate the relative contribution of each explanation. We apply the proposed decomposition strategy to the case of Argentina 1992 to 2015.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Jesús Otero

We test for weak- and strong-form efficiency of fixed-event individual forecast revisions of Brent and WTI prices using proprietary microdata from Energy & Metals Consensus Forecasts produced by Consensus Economics. We contribute to the literature on strong-form efficiency testing by assembling a comprehensive list of empirically relevant variables that are assumed to be in the information set of the forecasters. This set includes variables that aim to capture the effects of COVID-19 and the Russia-Ukraine conflict. We overcome the variable selection problem with fat data using a novel form of multiple testing and two popular methods from the penalised regression literature. Our results show that analysts' current revisions are independent of past revisions in most cases, supporting that Brent and WTI price forecast revisions are weakly efficient. However, there is little support for strong-form efficiency, conditional on passing weak efficiency. Indeed, we find that forecasters use past values of several variables to revise their forecasts, including measures of the extent of COVID-19 and the Russia-Ukraine conflict.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Eduard Martínez

This paper studies the effect of the intensive margin of a negative economic shock on crime. I collect the criminal records of 165,000 users of DMG, an informal financial sector firm that closed in Colombia at the end of 2008. I exploit the exogenous variation in users with capitalizable deposits within the days around the firm's statal intervention. The results suggest increased criminal reports for those suffering from the negative economic impact. Additionally, I found that criminal reports of the other household members increased by 3.5%. Finally, I use the lost investment amount to estimate the elasticity of crime.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Alvaro Sandroni

We ask whether the decisions of a rational and impartial judge can be distinguished from a coin toss. The question is inspired by the logic of the selection effect: Cases that have a clear outcome tend to be settled out of court. But that means that the cases that tend to go to court are often decided by small shocks on perceptions, the equivalent of a coin toss. That conclusion changes when judges are biased in their prior beliefs. In that event, outcomes will be determined exclusively by the judges prior beliefs. Either way the outcome of the case tends to be decided as if it is unaffected by the merits of the arguments presented in court. However, taken to its logical conclusion, the selection effect leads to something we refer to as the paradox of open methods: if rational judges decide to evaluate the merits of the cases that go to court, they will come to regret this as wasteful effort and strictly prefer to ignore the merits of the case. But if judges ignore the merits of the case, and this becomes generally known and taken into account by the litigants, judges will come to regret doing so and end up strictly preferring to attend to the merits of cases. This paradoxical seesaw can only be resolved in a full game-theoretical model of strategic interaction between the judge and the litigants. We refer to this game as the Judging Game. The strength of the selection effect and the fraction of judges who evaluate the merits of cases can thus be determined by the equilibrium of the Judging Game. Paper

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Christian Manuel Posso

We study gender inequality within the physicians labor market. We document significant gender gaps in earnings, starting in the early years of their careers. We provide evidence of firm-level drivers of this labor market inequality. We show that firm-specific wage premiums explain about 70 percent of the gender gap in the specific case of physicians. In addition, we show that the relative wage-setting effects - which measure the proportion of the difference that is associated with the presence of low supply elasticities - dominate, while the sorting effect plays only a tiny, negative role. Finally, we explore how the random assignment of recently graduated physicians to their first job through a nationwide public service program in Colombia with pre-set hospital wage policies and random allocation of hospitals, allow us to study the importance of hiring practices in the first and subsequent years of female physicians careers. Using administrative data from the program, we find that the random assignment to the first job increases the probability of a woman being hired and her earnings up to 5 years after the program. The evidence suggests that the random assignment to the first job fostered impartiality in hiring and access to graduate degrees.

12:30 pm

Universidad de los Andes - W-101

Activo

Seminario CEDE - Facundo Sepúlveda

We study the life cycle pattern of job displacement, including wage losses and displacement risk, in an Overlapping Generations economy with a frictionless labor market. In our model, finitely lived worker-firm pairs accumulate both firm specific and general human capital. Competition for zero tenure workers and the non contractible nature of specific capital implies that wages are higher than productivity for newly tenured workers, and lower for those with longer tenure. In the life cycle, the expected value of the firm is then hump shaped, so displacement risk is naturally u-shaped, as in the data. Our model provides novel insights regarding the empirical relationships between tenure, age, and both displacement risk and post displacement wage loss. While most of the literature uses a framework based on search frictions to study job displacement, our results suggest that the non contractible nature of specific human capital can, by itself, explain most of the empirical regularities under study.

12:30 pm

Universidad de los Andes - W-101