1. M. Dell, B. Feigenberg and K. Teshima, "The Violent Consequences of Trade-Induced Worker Displacement in Mexico", forthcoming in American Economic Review: Insights
Mexican manufacturing job loss induced by competition with China increases cocaine trafficking and violence, particularly in municipalities with transnational criminal organizations. When it becomes more lucrative to traffic drugs because changes in local labor markets lower the opportunity cost of criminal employment, criminal organizations plausibly fight to gain control. The evidence supports a Becker-style model in which the elasticity between legitimate and criminal employment is particularly high where criminal organizations lower illicit job search costs, where the drug trade implies higher pecuniary returns to violent crime, and where unemployment disproportionately affects low-skilled men.
2. P. Bag and T. Sharma, "Sequential Expert Advice: Superiority of Closed-Door Meetings", The International Economic Review.
Two career-concerned experts sequentially give advice to a Bayesian decision maker (D).
We find that secrecy dominates transparency, yielding superior decisions for D. Secrecy empowers the expert moving late to be pivotal more often. Further, (i) only secrecy enables the second expert to partially communicate her information and its high precision to D and swing the decision away from first expert’s recommendation; (ii) if experts have high average precision, then the second expert is effective only under secrecy. These results are obtained when experts only recommend decisions. If they also report the quality of advice, fully revealing equilibrium may exist.
3. S. Garrido and E. Gutiérrez, "Time goes by so slowly (for those who wait): a field experiment in health care", in Latin American Economic Review.
We exploit a unique field experiment to recover the willingness to pay (WTP) for shorter waiting times at a cataract detection clinic in Mexico City, and compare the results with those obtained through a hypothetical dichotomous choice questionnaire. The WTP to avoid a minute of wait obtained from the field experiment ranges from 0.59 to 0.82 Mexican pesos (1 USD =12.5 Mexican pesos at the time of the survey), while that from the hypothetical choice experiment ranges from 0.33 to 0.48 Mexi-can pesos. WTP to avoid the wait is lower for lower income individuals, and it is larger the more accurately the announced expected waiting time matches the true values. Finally, we find evidence that the marginal disutility of waiting is not constant.
4. F. Meza. S. Pratap and C. Urrutia, "Credit, Misallocation and Productivity Growth: A Disaggregated Analysis", forthcoming in Review of Economic Dynamics.
Abstract: We study the effect of credit conditions on the allocation of inputs, and their implications for aggregate TFP growth. For this, we build a new dataset for Mexican manufacturing merging real and financial data at the 4-digit industrial sector level. Using a simple misallocation framework, we find that changes in inter-industry allocative efficiency account for 41 percent of changes in aggregate TFP. We then construct a model of firm behavior with working capital constraints and borrowing limits which generate sub-optimal use of inputs, and calibrate it to our data. We find that the model accounts for 38 percent of the observed variability in efficiency. An important conclusion is that heterogeneity in credit conditions across industries is key in accounting for efficiency gains. Despite overall credit stagnation, more access to credit and lower interest rates to distorted industries contributed substantially to the recovery from the 2009 recession, suggesting a plausible mechanism for credit-less recoveries.
5. D. Domínguez and I. Morgenstern, "A characterization of the random arrival rule for bankruptcy problems", Economics Letters Volume 174,Pages 214-217, 2019.
It is known that no additive division rules exist for bankruptcy problems. In this paper, we study a restricted additivity property which we call “feasible set additivity” (FSA). This property requires division rules to be additive when the set of feasible allocation vectors for a sum of problems does not include allocations that were unfeasible when considering each problem separately.
In addition, we characterize the random arrival rule as the only division rule satisfying FSA and equal treatment of equals for two and three-agent cases. We also show that this characterization holds when the endowment is small enough in relation to the claims, while the question of whether it holds in general remains open.