Working Papers
[Food Demand] Secular rise and pro-cyclical variation in markups: Evidence from US grocery stores. Coauthored with Bulat Gafarov and Jens Hilscher.
Presented at the 2023 SEA and 2024 AEA annual meetings. You may download the paper at SSRN.
This paper documents substantial time variations in price elasticities of demand and implied markups for the US food retail sector. First, we employ a Hausmantype IV to estimate store-level own-price elasticities at the market-good-year level, using scanner data of US grocery stores from 2001 to 2020. Then, we efficiently aggregate these data annually to estimate a common trend and cyclical variation in elasticities. Finally, we impute nationwide store-level price-cost markups from annual elasticities under a standard optimal pricing rule. We find (i) a long-run increase in US grocery store markups of 3.9% per year in the past two decades and (ii) a short-term decrease of 13.6% per year during aggregate demand contractions. We show the underlying elasticities are largely driven by economic and market factors, such as real GDP, housing prices, population, and product differentiation.
[Agricultural Production] The countervailing investment and rental-supply effects of securing land ownership: Theory and evidence from Nicaragua.
To be presented at the 2024 SEA and 2025 AEA annual meetings. You may download the early draft here.
Securing land ownership has long been hypothesized to bring about significant gains in both agricultural output and poverty reduction for rural economies endowed with unequal land ownership distributions. However, these win-win economic gains largely hinge on the premise that security improvement will simultaneously boost land-attached investments and increase land rental supply to facilitate land access for the rural poor. This paper argues that non-security barriers to long-term land rental contracts could break this premise by causing a countervailing interaction between the investment and rental-supply effects of securing land ownership. I provide suggestive evidence from Nicaragua, one of the poorest countries in Latin America. Recent panel data of rural household surveys show that after a plausibly exogenous improvement in land ownership security, previously-credit-unconstrained households significantly increased land-attached investments but not rented-out land, while previously-credit-constrained households did the opposite. These findings hold even for matched households based on their initial likelihood of being credit-constrained.