Publications in Refereed Journals
Traffic noise and property values: an instrumental variable strategy
for hedonic valuation
With Luis Bravo-Moncayo, Virginia Puyana-Romero, Michelle Romero, José Lucio-Naranjo and Enrique Suárez
Journal of Environmental Planning and Management
for hedonic valuation
With Luis Bravo-Moncayo, Virginia Puyana-Romero, Michelle Romero, José Lucio-Naranjo and Enrique Suárez
Journal of Environmental Planning and Management
Noise pollution is a consequence of socioeconomic development processes and urbanization. Noise action plans, urban planning, and traffic management are costly, and their undertaking raises the issue of the value of noise reduction to households. We use hedonic pricing to estimate the value of traffic noise for urban residents in Quito, Ecuador. Results were obtained using instrumental variables in order to control the possible omitted variables due to any spatial effect. Considering a large dataset of property attributes and noise exposure, properties inside the multiple land use were compared to those right behind them in a 20-meter buffer, which are characterized by similar structural attributes but different noise exposure levels.
The Long-term Effect of Resource Booms on Human Capital
Labour Economics
Labour Economics
Resource booms may reduce human capital accumulation. They can increase the opportunity costs of education by favoring low-skilled jobs, thus making it optimal for individuals to interrupt their education. This study uses proprietary individual-level data to study the long-term effects of an oil boom on human capital in a developing country. Exploiting variation in the timing of the shock and geographic differences in the effect of exposure to the boom, I find that exposure to the boom decreased college completion, increased low-skill employment, and had limited long-term effects on wealth accumulation.
This paper previously circulated under the title "A Blessing or a Curse? The Long-Term Effect of Resource Booms on Human Capital".
This paper previously circulated under the title "A Blessing or a Curse? The Long-Term Effect of Resource Booms on Human Capital".
| Working Paper Version |
The Economic Effects of Facebook
With Mofioluwasademi Odunowo, Trent MacNamara, Xiongfei Guo, and Ragan Petrie
Experimental Economics
With Mofioluwasademi Odunowo, Trent MacNamara, Xiongfei Guo, and Ragan Petrie
Experimental Economics
Social media permeates many aspects of our lives, including how we connect with others, where we get our news and how we spend our time. Yet, we know little about the economic effects for users. In 2017, we ran a large field experiment with over 1,765 individuals to document the value of Facebook to users and its causal effect on news, well-being and daily activities. Participants reveal how much they value one week of Facebook usage and are then randomly assigned to a validated Facebook restriction or normal use. One week of Facebook is worth $67. Those who are off Facebook for one week reduce news consumption, are less likely to recognize politically-skewed news stories, report being less depressed and engage in healthier activities. These results are strongest for men. Our results further suggest that, after the restriction, Facebook's value increases, consistent with information loss or that using Facebook may be addictive.
Neural based contingent valuation of road traffic noise
With Luis Bravo-Moncayo, Ignacio Pavón-García, and José Lucio-Naranjo
Transportation Research Part D 50 (2017) 26–39
With Luis Bravo-Moncayo, Ignacio Pavón-García, and José Lucio-Naranjo
Transportation Research Part D 50 (2017) 26–39
In this paper, we present a new approach to value the willingness to pay to reduce road noise annoyance using an artificial neural network ensemble. The model predicts, with precision and accuracy, a range for willingness to pay from subjective assessments of noise, a modeled noise exposure level, and both demographic and socio-economic conditions. The results were compared to an ordered probit econometric model in terms of the performance mean relative error and obtained 85.7% better accuracy. The results of this study show that the applied methodology allows the model to reach an adequate generalization level, and can be applicable as a tool for determining the cost of transportation noise in order to obtain financial resources for action plans.
Contingent valuation of road traffic noise: A case study in the urban area of Quito, Ecuador
With Luis Bravo-Moncayo, Ignacio Pavón-García, and José Lucio-Naranjo
Case Studies on Transport Policy 5 (2017) 722–730
With Luis Bravo-Moncayo, Ignacio Pavón-García, and José Lucio-Naranjo
Case Studies on Transport Policy 5 (2017) 722–730
The aim of this study was to estimate the value of noise pollution generated by transportation using a discrete choice survey. This paper reports the main findings of a contingent valuation of road traffic noise in Quito, Ecuador. In this sense, it was conducted a social survey in Quito in order to identify the respondents’ noise perception, and their willingness to pay in order to reduce the annoyance caused by road traffic noise. The
respondents’ road noise exposure levels were obtained through an RSL-90 acoustic model. The econometric model succeeded 81,43% of the willingness to pay for the validation data set. This study contributes toward assessing the environmental costs of transport in an Andean city within a policy making context.
respondents’ road noise exposure levels were obtained through an RSL-90 acoustic model. The econometric model succeeded 81,43% of the willingness to pay for the validation data set. This study contributes toward assessing the environmental costs of transport in an Andean city within a policy making context.
Working papers
Signaling on the Labor Market: Evidence from College Scorecards (Under Review)
With Melissa Miranda
With Melissa Miranda
Theory suggests that one of the reasons why individuals choose to attend a particular college is to signal their productivity to the labor market. Testing this prediction is challenging because it requires variation in the signal while keeping human capital constant. We study this proposition by exploiting an exogenous information change in the signal of graduating from a particular college. We analyze the effect of an unexpected change in a governmental college scorecard in Ecuador. Due to an unanticipated change in the ranking methodology, seven of the 11 highest-ranked universities fell to a lower ranking. If the signal of graduating from a particular university matters in the labor market, the ranking change should affect employment and wages. With access to proprietary data on 373,297 individuals, we implement a difference-in-differences design, comparing individuals whose universities maintained the highest ranking in 2013 to individuals whose universities’ ranking lowered in 2013. We show results consistent with signaling effects in an employer learning model. The ranking change decreased the probability of salaried employment and monthly wages for individuals who recently entered the labor market and whose universities decreased in ranking. This effect fades over time as individuals find other channels to reveal their productivity. In contrast, more experienced individuals were not affected by the ranking change, consistent with employers knowing their productivity. Finally, we show that the effect is driven by those employers more likely to rely on signaling to infer a potential worker’s productivity.
| Signaling on the labor market |
Age and the labor market for Hispanics in the United States (NBER Working Paper 30171 - Under Review)
With Joanna Lahey
With Joanna Lahey
We explore the labor market for Hispanic high school graduates in the United States by age using information from the U.S. Census, American Community Survey, and three laboratory experiments. We find, in general, that the differences in outcomes for these two groups do not change across the lifecycle. Moving to a laboratory setting, we provided participants with randomized resumes for a clerical position that are on average equivalent except for name and age (as indicated by date of high school graduation). In all three experiments, hypothetical applicants with Hispanic and non-Hispanic names were generally treated the same across the lifecycle by a student population, a population of human resources managers, and a more general population from mTurk. These results stand in contrast to earlier results that find strong differences by age in how Black and White resumes are treated.
The Political Divide: The Case of Expectations and Preferences (under review)
With Trent McNamara
With Trent McNamara
While polarization has become an identifying feature in political markets, little is known about its source, whether information can attenuate it, and its causal impact on behaviors. We run a field experiment to recover its distribution and novelly identify that the rise in polarization is driven by perceptions rather than preferences. We randomly introduce factual information and show this corrects misaligned beliefs. We further estimate that increasing polarization results in an individual being 0.35 s.d. less supportive towards the government, believe the government is less efficient by 0.42 s.d. and are less willing to compromise and trust by 0.43 s.d.
| The Political Divide |
Stuck in Traffic: Measuring Congestion Externalities with Negative Supply Shocks (under review)
Traffic congestion is one of the most challenging issues of urban agglomeration. Congestion costs are often higher than their socially optimal levels, and little is known about the key parameters needed to design optimal congestion policies. This paper addresses this issue by exploiting an exogenous reduction in for-hire vehicle supply in New York City. I estimate the effect of a vehicle on congestion and document substitution patterns to other transportation modes. A 9.1 percent reduction in the number of active vehicles decreases congestion by 0.46 minutes per mile. As vehicles leave the streets, for-hire trips decrease, resulting in increased waiting times and people switching to other transportation modes. Welfare increases for those who travel by vehicle because travel time is reduced. However, welfare decreases for those who face increased wait times or switch to a less-preferred transportation mode. A calibration exercise suggests daily net welfare gains between $0.5 and $1.0 million.
| Stuck in Traffic |
Vaccines at Work (under review)
With Manuel Hoffmann and Adrian Chadi
With Manuel Hoffmann and Adrian Chadi
Influenza imposes substantial costs worldwide in terms of human lives and productivity losses. Vaccination could be a cost-effective way to reduce these costs for firms and public health institutions, but low take-up rates, particularly of working adults, and vaccination unintendingly causing moral hazard may decrease its benefits. We ran a natural field experiment in partnership with a major bank in Ecuador where we experimentally modified its annual vaccination campaign. We find that assigning employees to get vaccinated during the workweek increased take-up by 112% compared to employees assigned to the weekend, which indicates that reducing opportunity costs plays an important role to increase vaccination rates. Peer take-up also increased individual take-up in a meaningful way. Contrary to expectations, we find that the effect of vaccination on flu diagnoses and sick days due to the flu is a precise zero. Using a dataset of administrative records on sick diagnoses and employee surveys, we find evidence consistent with moral hazard behavior, which could decrease the effectiveness of vaccination.
| Vaccines at Work |
Rate Caps, Competition and Welfare: Evidence from Ecuador's Consumer Credit Market
With Luis Antonio Vaca
With Luis Antonio Vaca
The dynamics of the credit market make the welfare implications of rate caps theoretically ambiguous. On the one hand, it is true that a sufficiently low interest rate ceiling will ration credit. On the other hand, if banks have market power then interest rate caps may be welfare enhancing. In this paper we exploit a natural experiment in Ecuador to analyze the effects of interest rate ceilings on access to consumer loans and on economic welfare. In August 2007, Ecuador switched from a regime that in practice implied no ceilings to a regime of increasingly binding interest rate caps. This policy change is an exogenous source of variation that potentially excluded some individuals from the consumer credit market. Our preferred estimates suggest that access to banks decreased between 0.5 and 1.1 percentage points in a country where access to consumer loans was 10.8% before the adoption of the policy.
An Empirical Study of the Credit Market with Unobserved Consumer Types
With Li Gan
NBER Working Paper No. 13873 Issued in March 2008
With Li Gan
NBER Working Paper No. 13873 Issued in March 2008
This paper proposes an econometric model to identify unobserved consumer types in the credit market. Consumers choose different amounts of loan because of differences in their time or risk preferences (types). Thus, the unconditional probability of default is modeled using a mixture density combining a type-conditioning default variable with a type-determining random variable. The model is estimated using individual-level consumer credit card information. The parameter estimates and statistical tests support this kind of specification. Furthermore, the model produces better out-of-sample predictions on the probability of default than traditional models; hence, it provides evidence of the existence of types in the consumer credit market.