e-Repositori UPF :: Master's Degree in Specialized Economic Analysis

Recent Submissions

Probability of cartel detection: an application to the Peruvian case
(2025-06) Galano, Antonia Claudia; García Oré, Juan Diego
This paper provides, to our knowledge, the first empirical estimate of the probability of cartel detection in Peru —a critical parameter used by the Peruvian competition authority (INDECOPI) to set cartel fines. Building on Bryant and Eckerd (1991), we calibrate a birth-and-death Markov model using the observed duration of cartels sanctioned by INDECOPI since its foundation. Our results indicate that the annual probability of detection lies between 18% and 31%, with a point estimate of 25%. This figure shall be interpreted as an upper bound, and places Peru at the higher end of international benchmarks.
What’s the beef? Conduct estimation in the vertical U.S. beef supply chain
(2025-06-27) Stubbings, Alice; Hain, Rebecca
Ongoing cartel cases against the largest four U.S. beef packers have once again brought the U.S. beef packing industry into the antitrust spotlight. This thesis uses a NEIO structural model to estimate the beef packers’ conduct in a vertical chain to disentangle market power exertion from exogenous supply and demand factors. We find significant estimates for the packers’ conduct parameters ranging from 0.047 to 0.194, with their Lerner Indices ranging from 0.019 to 0.080 in the alleged cartel period. These estimates indicate a change in conduct but provide no evidence of collusive behavior.
An investigation of place-based policies: the effects of opportunity zone designation on business and residential properties
(2025-07) Beattie, John; Osborn, Caroline; Ryan, Meghan
We analyze the effects of a salient United States place-based policy, Opportunity Zones (OZs), on local economic outcomes. Using a rich combination of data, we estimate localized effects of the policy at the census tract level, the natural unit of treatment. We then expand our unit of analysis to the Economic Place (EP) level to capture treatment intensity and ripple effects. Utilizing various forms of dynamic difference-in-differences estimators and leveraging sharp treatment timing, we find positive and increasing effects of the policy on net residential housing at the tract level. Further, we find that political dynamics predict OZ designation but do not seem to be an underlying mechanism for our results at the tract level. At the EP level, we uncover considerable treatment effect heterogeneity by population size on both residential and business addresses, with smaller EPs experiencing substantial positive treatment effects relative to larger ones.
Good governance and educational outcomes: evidence from the Aspirational Districts Programme in India
(2025-07-17) Domingo Enrich, Emma; Kurup, Aditya; Puccio, Giacomo; Varela, Joana
We examine whether India’s Aspirational Districts Programme (ADP), a governance initiative aimed at underdeveloped districts, improved the educational outcomes of rural children. Using a difference-in-differences approach with Propensity Score Matching, we estimate the programme’s causal effect on enrolment, reading, and math proficiency. Our findings indicate that ADP significantly increased school enrolment across age groups but did not improve learning outcomes. Further analysis suggests gains in material conditions may have supported higher enrolment but did not translate into improved household inputs relevant to learning. Moreover, we provide suggestive evidence that a commensurate increase in schooling inputs did not accompany the increase in enrolment.
Free tuition in the Chilean higher education system
(2025-07-16) Bishkov, Lyuben; Cabezas, Nicolás; Mariano, Mariana Negreiros
Free tuition policies aim to expand access, but their broader effects remain debated. Chile’s 2016 Gratuidad reform made university free for students in the lowest six income deciles. Using administrative records, we estimate its intention-to-treat impact on enrollment and dropout rates via staggered difference-in-differences and discrete-time hazard models. Eligibility leads to a 4 percentage point increase in on-time university enrollment and a 9-point increase in deferred enrollment. While the former gains are offset by declines at non-participating institutions, the latter reflects net enrollment growth. Once enrolled, first-year dropout falls by 3–5 points, with smaller effects in later years. A Theil-entropy decomposition reveals an unintended, policy-induced increase in institutional segregation, as higher-income students increasingly enroll in non-covered universities while lower-income students concentrate in those included in the policy.
Pollution and premature deindustrialization: examining the effects of black carbon on manufacturing employment in developing countries
(2024-06-08) Vilio, Adam; Sexton, Emmett; Chaar, Tania; Bester, Jan
This study investigates the impact of pollution on manufacturing mployment shares in developing countries , contributing to previous literature on the potential causes of premature deindustrialization. Analyzing data from 112 low, and low-middle income countries between 1998 and 2021, we employ wind speed as an instrumental variable to address endogeneity concerns. Our findings reveal that higher pollution levels significantly reduce manufacturing employment shares, with a pronounced effect in regions such as India, South America, and Africa. At the state level in India, a 10% increase in pollution is associated with a 0.87 percentage point decrease in manufacturing employment shares. However, this effect is less evident at the district level, suggesting that the relationship may be more influenced by policy making at national and state levels. We explore the role of international climate policies, such as the Clean Development Mechanism (CDM), in shaping these outcomes. We find that CDM projects do not significantly alter the pollution-employment relationship, opening avenues for future research to explore other potential mechanisms, such as the productivity impacts of pollution on workers and the subsequent effect this has on firms’ location decisions.
Does monetary policy impact innovation? Evidence from the euro area
(2024-06-07) Pio Tripodi, Vincenzo; Martin, Fausto; Nikolskii, Nikita; De Kuyper, Derk
This paper provides the first systematic assessment of the effect of monetary policy on innovation activities in the Euro Area. The main finding is that a monetary tightening induces a significant decline in innovation activity at the country, regional, and firm levels. A monetary tightening of 100bps leads to declines in aggregate investment in intellectual property (10% fall one year after the shock), in firm-level R&D spending (15% fall one year after the shock), and in the stock of intangible capital at the regional level (10% fall three years after the shock). We also find the effects to be heterogeneous across firms: in particular, R&D spending falls significantly more for small firms, which is consistent with the common notion that credit constraints may be important drivers of the effects of monetary policy.
Investing in tomorrow's paychecks: the link between education spending and wages in Dominican Republic
(2024) Rodríguez, Alejandro Enmanuel ; Zhou Wu, Jiaxian; Bakker, Mees; Rauth, Nicolas; Mungale, Vaishnavi
This paper explores how increased educational spending has affected wages in the Dominican Republic. In 2013, the government increased the education budget by 70%. We compared students who missed out on this funding with those who benefited from it. Our findings show that students who received the extra funding increased their years of education by 0.43, and saw their hourly wages increase by 10.9% in 2022. Using a Two-Stage Least Squares (TSLS) approach, we confirmed that more schooling directly leads to higher wages, and our results show that quality of education did not create a bias in our results.
The structural presumption in horizontal merger review: evidence from Monte Carlo experiments
(2024-05-28) Bernardini, Davide; Wohlleben, Matt
US antitrust agencies lowered the threshold of concentration required for the presumption of anticompetitive effects (“the structural presumption”) in 2023. We provide evidence using Monte Carlo experiments that the new presumption flags many more mergers and reflects an agency preference to decrease the Type II error rate at the expense of generating many more Type I errors. We also show that the agencies could improve the accuracy of the presumption without increasing leniency by relying only on changes in concentration. This is true across common settings of competition and demand structures, though the optimal level of the presumption varies. Then, we show that the structural presumption is an effective way to screen for mergers under uncertainty in parameters, but current concentration measures are inadequate to screen for coordinated effects.
A tale of two tides: comparing the price effect of market concentration and alliances in the container shipping market
(2024-06) Cuka, Patrick; Villacorta, Raúl
This study investigates the impact of shipping alliances and market concentration on maritime freight rates. For this purpose, we analyse Peruvian containerized imports at the transaction level using customs data and public mergers, acquisitions, and shipping alliances announcements from 2014 to 2018. Using a modified price-concentration analysis (PCA), we find that higher carrier-level concentration raises prices, while greater alliance-level concentration lowers them, particularly on smaller routes. Additionally, mergers and acquisitions tend to increase prices. Our findings are robust to different specifications and can be applied to countries with similar characteristics to those of Peru.
Household indebtedness and the effectiveness of monetary policy: evidence from the Eurozone
(2024-06-10) Frigerio, Lucía; Magnífico, Luciano
This paper investigates the relationship between household indebtedness and the effectiveness of monetary policy among Euro Area countries. We follow a panel local projection approach, allowing for non-linearities and a high-frequency framework for identifying monetary shocks. Our findings indicate that elevated household debt, relative to its trend, amplifies the effects of monetary policy shocks on macroeconomic variables, highlighting a significant cash flow channel in high-debt scenarios. Additionally, we assess the influence of mortgage interest rate types on this relationship, finding that the proportion of adjustable-rate mortgages does not significantly affect the cash flow channel when analyzed alongside the credit gap.
Inflation in the face of weather shocks: evidence from Germany, India and Spain
(2024-06-10) Hegarty, Ronan; Kanagaraj, Pavitra
Climate change poses a significant challenge to central banks aiming to maintain price stability, as frequent and severe weather shocks increase inflation volatility. This paper investigates the impact of temperature shocks on inflation in three major economies, using a high-resolution weather dataset and local projection models. Results indicate asymmetric effects: minor energy price declines in advanced economies due to reduced heating demand and short-run deflation in the emerging economy, with prices quickly realigning. Overall, temperature shocks have limited, temporary effects on prices, driven by demand reductions.
Electricity prices during the energy crisis in Germany: the role of market power
(2024-06-02) Saile, Anna; Fladung, Till
During the energy crisis in 2022, electricity prices in Germany soared to unprecedented levels, placing a significant burden on consumers. To explore the drivers of the high electricity prices, we develop an electricity dispatch model that simulates hourly equilibrium prices under the assumption of perfect competition. We then extend this model to account for firms exercising market power. By comparing the outcomes of the perfect competition and Cournot competition models with actual market data, we demonstrate that market power likely contributed to higher prices during the crisis, elevating them beyond what rising input costs alone would justify.
Optimizing emissions reduction: green hydrogen subsidies vs. Grid Interconnection in Texas
(2024-06) Araya, Fernando; Bockhold, Marcus; Marano Suffern, Nazarena
Our paper analyzes the CO2 emissions reduction potential and cost of two alternative policies associated with installing new wind capacity (30 GW) in Texas-US: developing a green hydrogen industry through the Inflation Reduction Act (IRA) subsidy or investing in transmission infrastructure connecting Texas with Western US. We construct a model to simulate the electricity market outcomes for both regions in the two scenarios. We find that investing in transmission infrastructure can reduce up to 80 Mt CO2 per year at US$ 832 per ton, while the green hydrogen policy can reduce up to 18 Mt CO2 per year at US$ 300 per ton.
The impact of Brexit on research and development
(2024-06) Coughlan, James; Hewett, Timothy; Pla Farriol, Eduard
This paper exploits the natural experiment provided by the 2016 Brexit referendum to examine the effects of increased trade barriers on investment in research and development. We use a synthetic control method to compare research expenditure in the United Kingdom before and after Brexit to artificial controls comprising EU countries and regions. Our findings suggest that Brexit had little effect in the short-term, and we argue a substantial increase in research expenditure from 2020 onwards was driven by investments in the pharmaceutical and medical device sector in response to COVID-19 rather than Brexit. We also find geographic heterogeneity, with regions containing prestigious universities and research centres such as London and East England most resilient to the shock.
Do early pension withdrawals reduce labour supply?: evidence from Australia’s pandemic response
(2024-06) Lane, Oscar; Liu, Mingji
We investigate the impact of the early release of Australian pension savings during the COVID-19 pandemic on labour supply behaviour using a comprehensive longitudinal panel dataset. Given the endogenous nature of this policy, we apply an instrumental variable strategy to isolate the causal effect of the policy on hours worked. Our findings show the scheme led to a large reduction in hours worked in 2020. These effects persisted but moderated in 2021 and 2022. Our findings inform the labour market impacts of early pension release schemes in a crisis context and the design of pension systems more broadly.
Shaken foundations: the impact of the 2007 Perú earthquake on human capital accumulation
(2023-06) Leslie, Cathal; Tillo, David; Morris, Harry; Castillo, Lakshmi; Atazona, Luke; Cheeseman, William
Our paper investigates whether the 2007 earthquake in Ica, Perú had long lasting impacts through human capital accumulation in Perú. We conduct our analysis through a dynamic difference-in-difference and propensity score matching approach, constructing treatment rings based on actual earthquake intensity. We find that the earthquake had a significantly negative and persistent impact on several dimensions of education, including a 17 per cent increase in the student dropout rate. A common theme from our results is those who were youngest at the time of the earthquake are most impacted, consistent with the existing literature and 1000-day hypothesis. Our research highlights the importance of prioritizing limited resources on the young and most vulnerable in the aftermath of natural disasters.
Banking crisis prediction: exploring the role of text-based indicators
(2023-06-12) Hunter, Timothy; Garcia Aguilar, Ferran
We study text indicators to improve banking crisis forecasts. Using newspaper headlines from 18 countries over 1950-2019, we apply latent dirichlet allocation (lDA) to extract topic frequencies summarising the economic news written about a country. Including these variables in a logit model, we find significant improvement in predicting banking crises, but there is evidence that this is due to random chance, and results are not replicated using random forests. This runs counter to findings from other authors, suggesting that lDA may be over-sensitive to specification. Thus, further research should refine the lDA process, to establish a standardised approach across research.
The impact of a minimum wage increase on labour market outcomes: evidence from the northern Mexican border
(2023-06) Ríos Juaristi, Silvia; Easterling, Joe; Torres Rojas, Inés; Contreras Contreras, Jimena
A large informal sector and a low minimum wage have contributed to persistently high rates of inequality and poverty across Mexico. In particular, the development of cities located along the Mexico-US border has lagged behind in recent decades. The Northern Border Free Zone was implemented to counter this stagnation through economically stimulating policies, including a doubling of the minimum wage. This paper applies a Difference-in-Differences approach to estimate the impact of the minimum wage increase on low-wage workers. We find that the minimum wage significantly increased the wages of low-wage workers in both the formal and informal sector. Whilst we do not find any evidence of disemployment effects in either sector, we do find that the policy caused low-wage workers to work significantly less hours per week.
Fiscal insurance during financial distress: the case of Belgian sovereign debt in the 21st century
(2023-06-12) Alturki, Deema; Bernstein, Emil; Lara White, Isabela
We empirically test the theoretical hypothesis that long term bonds offer governments fiscal insurance in times of crisis, analyzing Belgian sovereign debt dynamics during the 21st century. We use a novel data set of monthly prices and quantities for bonds in circulation between 2000 and 2022. We calculate total market value of debt and one- period holding returns, capturing the funding cost in the government’s inter temporal budget constraint. The main findings of the study indicate a positive co movement between bond prices and government net funding requirement during periods of financial distress, suggesting a limited role of long bonds in fiscal insurance.

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