Publications in Refereed Journals
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
Stuck in Traffic: Measuring Congestion Externalities with Negative Supply Shocks
Traffic congestion is one of the most challenging issues of urban agglomeration. Congestion costs are often higher than their socially optimal levels because of a missing market problem: roads are generally not priced. Relatively little is known about the key parameters needed to design an optimal congestion policy. This paper addresses this issue by estimating the effect of an additional vehicle on traffic congestion and documenting the substitution patterns to other transportation modes caused by changes in the number of vehicles in New York City. I exploit an exogenous reduction in for-hire vehicle supply during major Muslim holidays. The estimates indicate that during these holidays the number of active vehicles decreases by 9.1 percent of the total, which decreases congestion by 0.46 minutes per mile. As vehicles leave the streets, the estimates show that the number of for-hire trips decreases, 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 that this reduction of vehicles results in daily net welfare gains between $8 and $13 million.
| Stuck in Traffic |
Vaccines at Work
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 |
A Blessing or a Curse? The Long-term Effect of Resource Booms on Human Capital
Is natural resource abundance a blessing or a curse for a country? An important concern is the possibility that resource booms reduce human capital accumulation. These booms favor low-skill jobs, which increases the opportunity cost of education making it optimal for some cohorts to interrupt their education. If these individuals do not resume their education, they may lose pecuniary and non-pecuniary benefits of education in their lifetime. For a country, lower human capital may constrain its long-term growth. I use proprietary individual-level data to study the long-term effects of exposure to the 1970s oil boom on human capital accumulation in the context of a developing country. I exploit variation in the timing of the shock and geographic differences in the cost of college attendance and find that exposure to the boom decreased college completion and increased low-skill occupation among affected individuals. I show evidence consistent with the hypothesis that individuals shift into highly remunerative low skilled employment and away from college because the boom decreased the returns of a college education. In line with this, despite the reduction in educational attainment, I find no effects on wealth accumulation.
| Blessing or a Curse |
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.