Matias Busso

Research Department
Inter-American Development Bank
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Washington, DC
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NBER Working Papers and Publications

April 2014The Causal Effect of Competition on Prices and Quality: Evidence from a Field Experiment
with Sebastian Galiani: w20054
The potential benefits of demand side interventions may leak into the profits of suppliers whenever there is market power. In those situations, governments could attempt to regulate the market or to increase competition. We provide the first experimental evidence on the effect of increased competition on prices and quality relying on an intervention that randomized the entry of retail firms into 72 local markets in the context of a conditional cash transfer program. Six months after the intervention, product prices decreased by about 5 percent while service quality perceived by consumers improved.
June 2010Assessing the Incidence and Efficiency of a Prominent Place Based Policy
with Jesse Gregory, Patrick M. Kline: w16096
This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. To ground our welfare analysis, we develop a heterogeneous agent general equilibrium model in which the distortions generated by place-based policies depend upon a set of reduced form elasticities which our empirical work centers on estimating. Using rejected and future applicants to the EZ program as controls we find that EZ designation substantially increased employment in zone neighborhoods, particularly for zone residents. The program also generated wage increases for workers from zone neighborhoods worth approximately $320M per year. Based upon estimates of the number of...

Published: Matias Busso & Jesse Gregory & Patrick Kline, 2013. "Assessing the Incidence and Efficiency of a Prominent Place Based Policy," American Economic Review, American Economic Association, vol. 103(2), pages 897-947, April. citation courtesy of

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