Publications
We consider a nondurable good monopolist that collects data on its customers in order to profile them and subsequently practice price discrimination on returning customers. The monopolist’s price discrimination scheme is leaky in the sense that an endogenous fraction of consumers choose to incur a privacy cost to conceal their identity when they return in the following periods. We characterize the Markov perfect equilibrium of the game under two alternative customer profiling regimes: full information acquisition (FIA) and purchase history information (PHI). In both cases, we find that, contrary to what could be expected, the monopolist’s aggregate profit is not monotonically increasing in the level of the privacy cost, but a U-shaped function of it, leading to ambiguous profit effects: a reduction in privacy costs increases the fraction of customers who choose to be anonymous (detrimental profit effect), but it also softens the firm’s introductory price, reducing the pace at which prices targeted to new customers fall over time (positive profit effect). When comparing results under FIA and PHI, we find that market expansion is faster, and more customers conceal their identity under FIA than under PHI. Equilibrium profits are also higher in the FIA case. Although equilibrium profits are U-shaped functions of the privacy cost in both profiling regimes, they tend to be globally decreasing with the privacy cost under PHI and globally increasing under FIA.
I present a model of optimal capital taxation where agents with heterogeneous labor productivity randomly draw their rate of return to savings. Because of scale dependence, the distribution of rates of returns can depend on the amount saved. Uncertainty in returns to savings yields an insurance rationale for taxing capital on top of labor income. I first show that, because of scale dependence, agents making the same saving decision should access the same rate of return at the optimum. I then constrain the information set of the government and show that, as soon as return are uncertain, positive capital income taxation is needed at the optimum. The optimal linear tax on capital income trades off insurance with distortions to both savings and to the rate of return in a context of scale dependence. Eventually, I argue that scale dependence in and of itself is not sufficient to justify capital taxation on top of labor income taxes. These results are still valid when agents can optimize between a risk-free and a risky-asset that can both exhibit scale dependence.
The global pandemic of COVID-19 has underlined the need for more coordinated responses to emergent pathogens. These responses need to balance epidemic control in ways that concomitantly minimize hospitalizations and economic damages. We develop a hybrid economic-epidemiological modeling framework that allows us to examine the interaction between economic and health impacts over the first period of pathogen emergence when lockdown, testing, and isolation are the only means of containing the epidemic. This operational mathematical setting allows us to determine the optimal policy interventions under a variety of scenarios that might prevail in the first period of a large-scale epidemic outbreak. Combining testing with isolation emerges as a more effective policy than lockdowns, substantially reducing deaths and the number of infected hosts, at lower economic cost. If a lockdown is put in place early in the course of the epidemic, it always dominates the “laissez-faire” policy of doing nothing.
In 2020, Berlin introduced a rigorous rent-control policy responding to soaring prices by capping rents: the Mietendeckel (rent freeze). The German Constitutional Court revoked the policy only one year later. Although successful in lowering rents during its duration, the consequences for Berlin’s rental market and close-by markets are per se not clear. This article evaluates the short-term causal supply-side effects in terms of prices, quantities, and landlords’ strategic behavior. We develop a theoretical framework capturing the key features of first-generation rent control policies and Berlin-specific aspects. Using a rich pool of detailed rent advertisements, predictions are tested, and further empirical causal inference techniques are applied for comparing price trajectories of dwellings inside and outside the policy’s scope. Mechanically, advertised rents drop significantly upon the policy’s enactment. A substantial rent gap along Berlin’s administrative border emerges, and rapidly growing rents in Berlin’s (unregulated) adjacent municipalities are observed. Landlords started adopting a hedging strategy insuring themselves against the risk of contractually long-term fixed low rents following a potentially unconstitutional law. Whereas this hedge was beneficial for landlords, the risk was completely borne by tenants. Moreover, the number of available properties for rent dropped significantly, a share of which appears to be permanently lost for the rental sector. This hampers a successful housing search for first-time renters and people moving within the city. Overall, negative consequences for renters appear to outweigh positive ones.
This paper was accepted by Victoria Ivashina, finance.
Funding: This research benefits from funding by the FNR Luxembourg National Research Fund [CORE Grant 3886] (ASSESS) and the OeNB Anniversary Fund [Grant 18767] (LocHouse). M. Fongoni further thanks the Department of Economics at the University of Strathclyde for support and acknowledges funding from the French government under the “France 2030” investment plan managed by the French National Research Agency [Reference ANR-17-EURE-0020] and from the Excellence Initiative of Aix-Marseille University - A*MIDEX.
Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4775.
Has secular education contributed to the decline of polygamy in Africa? To answer this question, we study a wave of public school construction in late-colonial Cameroon. Our difference-in-differences and event-study specifications show that school openings have simultaneously increased education and the chances to be in a polygamous union for men and, more surprisingly, for women. We estimate a structural model of marriage to explain why education made women more likely to be in a polygamous union. The main estimated channel is marriage to educated men who are more often polygamists than uneducated men, not direct preferences for polygamy.
Understanding the mechanisms of deforestation is necessary in order to slow or arrest its progress. To accomplish this requires rigorously estimating the demand for deforestation. We contribute to this endeavor by estimating the effect of crop prices on the demand for conversion of land from forest to agriculture in the tropics during the 21st century. The two main difficulties involved are the lack of harmonized data on local crop prices in the tropics and the fact that they are determined simultaneously with decisions to deforest. We propose a strategy to circumvent these two issues using high-resolution annual forest loss data for the tropics, combined with information on crop-specific agricultural suitability and annual international crop prices. We find that crop price variation has a significant impact on deforestation: increases in crop prices are estimated to be responsible for one-third of total deforestation in the tropics (totaling about 2 million km2) during the period 2001–2018. We also find that the degree of openness to international trade and the level of economic development are first-order local characteristics affecting the magnitude of the impact of crop prices on deforestation.
Background:
Although mother-to-child transmission (MTCT) of hepatitis B virus (HBV) is prevalent in West Africa, epidemiological data on HBV infection in women remain scarce. We studied i) hepatitis B surface antigen (HBsAg) prevalence and its correlates, ii) HBV screening history and serological status awareness, iii) MTCT risk and treatment needs in Senegalese women.
Methods:
A cross-sectional population-based serosurvey for HBsAg positivity was conducted in 2018–2019 in the rural area of Niakhar (Fatick region, Senegal). Participants were offered home-based HBV screening and answered face-to-face questionnaires. HBsAg-positive participants underwent clinical and biological assessments. Data were weighted and calibrated to be representative of the area’s population. Logistic regression models helped identify factors associated with HBsAg-positivity in adult women (> 15 years old).
Results:
HBsAg prevalence in adult women was 9.2% [95% confidence interval: 7.0–11.4]. Factors associated with HBsAg-positivity were being 15–49 years old (ref: ≥ 50), living in a household with > 2 other HBsAg-positive members, and knowing someone with liver disease. Only 1.6% of women had already been tested for HBV; no one who tested HBsAg positive was already aware of their serological status. In women 15–49 years old, 5% risked MTCT and none were eligible for long-term antiviral treatment.
Conclusions:
Adult women have a high HBsAg prevalence but a low MTCT risk. Low rates of HBV screening and serological status awareness argue for the adoption of systematic screening during pregnancy using free and rapid diagnostic tests. Additionally, screening household members of HBsAg-positive women may greatly improve the cascade of care in rural Senegal.
This paper introduces the class of quasi score-driven (QSD) models. This new class inherits and extends the basic ideas behind the development of score-driven (SD) models and addresses a number of unsolved issues in the score literature. In particular, the new class of models (i) generalizes many existing models, including SD models, (ii) disconnects the updating equation from the log-likelihood implied by the conditional density of the observations, (iii) allows testing of the assumptions behind SD models that link the updating equation of the conditional moment to the conditional density, (iv) allows QML estimation of SD models, (v) and allows explanatory variables to enter the updating equation. We establish the asymptotic properties of the QLE, QMLE and MLE of the proposed QSD model as well as the likelihood ratio and Lagrange multiplier test statistics. The finite sample properties are studied by means of an extensive Monte Carlo study. Finally, we show the empirical relevance of QSD models to estimate the conditional variance of 400 US stocks.
What does the American movie industry tell us about the economic role of Wall Street and the perception of the stock market over time? Through a substantial corpus of American films from the 20c. and 21c, this article illustrates how, in three distinct periods, Hollywood has been able to stage finance and contribute to the myth of Wall Street. A minor subject until the 1980s, these years have seen the appearance of financial blockbusters with the rise of the financialization of the economy. The subprime crisis renews the genre, questioning the place of the stock market and the ethics of traders.
This paper highlights the procyclical and unstable behaviour of mutual funds, characterized by a varying sensitivity on common asset pricing factors. It proposes a novel factor model that allows for regime changes associated with macroeconomic and financial state variables. Estimated on a panel covering 825 US equity mutual funds over a period of 30 years, it appears that the yield curve, the dividend yield, short term interest rates and the industrial production coincide with regimes switches in the Fama–French factors. Furthermore, the estimated regimes coincide with financial crises and economic downturns, thus confirming the procyclical behaviour of mutual funds' returns. These findings, coupled with the emerging systemic role of mutual funds, promote the consideration for a specific macroprudential regulatory framework targeted at the mutual fund industry.
