On August 13th, 2015, Professor Wolak was interviewed along with Monica Padilla and Ted Ko by KALW, a public radio station in San Francisco. The particular topic of interest for the hour-long segment was CCAs (Community Choice Aggregation), which provide an alternative way for communities to receive electricity other than the commonplace utilities. Although the CCA bill came out in 2002, there are only three remaining CCAs today.
Stanford students, under the guidance of the Stanford Program on Energy and Sustainable Development and in partnership with the Freeman Spogli Institute and the Universidad Popular Autónoma del Estado de Puebla (UPAEP), are currently administering surveys throughout Puebla, Mexico. The surveys primarily consist of three stages: determining a household's energy consumption, educating the household on how their electricity bill is calculated, and suggesting at least one cost-saving strategy the household could adopt. The research project is a continuation of the work that the students began in Econ 121: Social Science Field Research Methods and Applications, taught by Ognen Stojanovski, Frank Wolak, and Mark Thurber. The trip to Mexico will last for four weeks.
You can follow the experiences of the students at their blog
In addition, the students have been posting pictures from their trip on the FSI Instagram
It is August again, and my wife and I are back on our farm. We have a medium-sized operation in east-central Iowa that produces soybeans, alfalfa, and corn, and that also supports an Angus cow-calf herd. These summers are supposed to be quiet, relaxing times away from the bustle of Stanford University. However, the days here seem anything but tranquil. Two years ago my almanac report dealt with one of the worst droughts in Iowa’s history; last year the focus was on flooding and the wettest planting season on record. I suppose it is only fair that wind should be the main topic this year. For our rural neighborhood, only problems, not answers, seemed to have been blowin’ in it.
Two evenings after our arrival from California, we were sent scurrying to our doubly reinforced “safe” room in the basement. Warning sirens blared, all television stations went on emergency broadcasting, and the spontaneous neighborhood phone line magically got activated. Everything was for real, and all hell broke loose. Eighty-five m.p.h. flat-line winds, grape-sized hail, and buckets of rain. The power went out, and our safe-room conversation centered on whether or not to start our small generator—not for lights, but to assure that the sump pump continued working!
For a swath three miles wide and 15 miles long the tornado danced—jumping here and skipping there. Some farms were spared; others were pretty much demolished. We were moderately lucky. We lost an infinite number of branches and our largest oak tree—a four-foot diameter, 70-foot tall specimen. Entire trees were twisted off like toothpicks. Shingles from roofs went missing, as did white fencing. But we were among the lucky ones—no major buildings were lost and no people or animals were injured.
Two farms over, the five-bin corn storage unit took a direct hit. Two 120-foot tall elevators that lift grain to the top (called legs, although the anatomy analogy makes no sense) lay in a crumpled mess. These bins hold some 240,000 bushels of corn and there are massive amounts of steel involved. The broken legs looked, at 120X scale, like an angry third-grader had deliberately slammed his Lego creations onto the ground. The difference is that the repairs, labor costs, and replacement parts for the bins and legs total $750,000. Farmers soon began re-reading their insurance policies about acts of God, depreciation allowances, and the rules for full versus partial replacement.
The morning following the storm, an eerie calm was soon replaced by a different form of energy. Other work seemed to stop in a region larger than the storm-hit area. No one arranged it, but neighbors suddenly appeared at each other’s farmsteads with tractors, loaders, pickups, and chainsaws. Small mountains of brush, trees, and building parts began to emerge, to be burned at a later date—no doubt with generous burn permits being granted by the county.
At the time of the storm, corn was about waist high. Like the trees, it took a serious beating throughout the storm’s path. The corn stalks were tightly packed in narrow rows as a consequence of the changed density of planting—from 20,000 kernels per acre 20 years ago to 35,000 currently. (Bags of seed corn containing 80,000 kernels now typically sell in excess of $300, putting seed costs per acre about on a par with the cost of nitrogen fertilizer.) This tightly woven carpet of corn was now leaning at 45 degrees—or worse. The question was whether the stalks would straighten up. And the answer turns out to be “sort of.” Many of them are “goose-necked,” a much used word now in farmer conversations. The concern is, IF large ears develop, will the stalks be sturdy enough to support them? Or, will a large amount of “ear droppage” seriously reduce yields and profits? We continue to be optimistic, and are still hoping for corn yields of 190 bushels per acre, not far from our best year of 220 bushels.
Morning coffee conversations at the old limestone café have been fairly somber affairs this summer. (The general store has changed hands, but unfortunately, the watery coffee and the stale cookies have not improved.) Farmer faces were grim even before the storm, mainly because of what has happened to corn prices. In August 2012, local farmers were being offered $7.65/bushel [56 pounds] of corn; in August 2013, the price was $6.20/bushel, and on August 20, 2014, the price was $3.60/bushel. Suddenly the rush to buy new pick-ups and large harvesting equipment slowed drastically. John Deere, the major farm-equipment manufacturer, has already laid off hundreds of workers at various Iowa sites.
Orders have not stopped entirely, however, largely because of crop insurance. Virtually all farmers have either 75% or 85% revenue protection. If a combination of yield and/or price declines cause revenue to be less than 75% (85%) of normal, farmers are reimbursed by private insurance companies. The premiums for this revenue-protection insurance are heavily subsidized by the federal farm program. Taxpayers underwrite more than 60% of the total insurance premiums, which last year resulted in subsidies to farmers of about $9 billion. Historic yields are used in the insurance contract, and this year the early insurance lock-in price was $4.62/bushel. That price looked low in the spring, but now looks extremely favorable. Unfortunately, many of my neighbors chose the “wrong” insurance option. They were able to purchase 75% revenue protection for about $4.50/acre, whereas the 85% protection cost about $19/acre. For a farmer with 1500 acres of corn, the difference in insurance premiums was more than $20,000. But given declining corn prices, the cheaper insurance option for 2014 will surely turn out to be the most costly choice at the end of the season. Farm decision making these days is mostly about risk management, and that is why crop insurance was such a big element in the new farm program.
Perhaps the hottest topic of conversation at morning coffee centered again on wind, but not of the tornado variety. It turns out that “the wind comes sweeping down the plain” in Iowa as well as in Oklahoma. Iowa is the third-largest producer of wind energy, and wind power supplies a hefty 27 percent of Iowa’s total energy use. So why are my neighbors upset? It is something called the Rock Island Clean Line (RICL), and a bit of history is in order.
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The old Rock Island Line was a rail company—made more famous than it really deserved to be by Johnny Cash. The line ran five miles south of our farm, and yes, it was a “mighty fine line” that did carry cows, sheep, pigs, and mules. But it went bankrupt in 1975. The Rock Island Clean Line originally planned to use some of the old right-of- way for quite a different purpose—transporting wind-generated power from northwest Iowa on huge towers, with cables carrying direct-current electricity into the Illinois market to the east. It turned out, however, that too much of the old right of way went through urban areas and was unsuitable, so RICL will purchase some 500 linear miles of farmland right-of-way for the towers.
Farmers are rationally and irrationally furious. (The line was originally scheduled to go across the full length of our farm, so we have been directly involved in the discussions.) It has been extremely difficult to get straight answers about the line, with the company and the Iowa Utilities Board doing a dance in which neither wants to lead. There is no doubt that these140-foot towers create an ugly line of sight; they complicate farming with large machinery; and they seriously impact adjoining fields during the construction phase. The company believes that it is offering generous one-time compensation—the equivalent of $10,000 to $15,000 per acre in most cases—but it then retains easement rights to this land forever, including the authority to sell the rights. Farmers are livid—they basically do not want the line from which they will receive no benefits—but they are being faced with potential eminent domain proceedings if they do not agree to sell. All sorts of NIMBY arguments are being brought forward, from the “government can’t tell us what to do,” to “the lines will emit electrical forces that will cause health effects,” to “they are not paying enough,” to “why should we use good Iowa soil to transport electricity rather than to produce food for the hungry?” The last of these comments is the one I have heard most often. When I inquired as to whether the coffee group was also against ethanol—since 40% of Iowa corn is going into gas tanks rather than hungry mouths—I was NOT regarded as a helpful contributor to the conversation!
In the end, I suspect that the Rock Island Clean Line will prevail, and that farmers and their families will learn to accommodate the power towers. Many farmers will grumble publically, but smile privately en route to their banks with rather large checks. However, both the process and outcome have stirred up deep passions about who controls the land.
Not all farmers are sad this summer, and the winds of good fortune have blown in the direction of cattle feeders. The structure of cattle feeding in Iowa has changed enormously in recent times. I am the son of a mid-sized feeder, and spent a good deal of my youth working with cattle and driving cattle trucks. Most east Iowa farms these days are strictly grain farms, in large part to free farmers from the 24/7 burden of animal care. My neighbor talks about his corn-Texas crop rotation—growing corn in the summer and going to Texas for the winter.
Two black angus calves.
There are only two large cattle feeding operations left in Linn County where I live, and both are within four miles of our farm. I was invited by one of the owners to attend a cattle auction with him, and to see for myself just how much things had changed. He owns his own 18-wheeler, and almost every week takes a load (36 head) of prime beef to the auction. Cattle are taken to the auction pens the night before the sale and are taken off of feed and water. These steers weigh between 1400 and 1500 pounds, and buyers want assurance that the animals have not gorged on feed and water just before crossing the scales. The cattle are weighed early the morning of the sale, and weights are then flashed on a scoreboard as the animals enter the sale ring.
There is still an amazing amount of ritual at a cattle auction—I had forgotten just how much! Prime steers are typically sold in lots of 12 animals. They enter the ring from one side, and are moved about by a “ring man” so that buyers can get a good view of them. Part of the ritual is where various people sit. A small group of farmers/sellers sits in one section, typically bantering about whom has the best cattle and whose will “top the sale.” The buyers sit near the top of the bleachers, in the same spot each week, but separated from each other. (They would not want a casual conversation between them to be construed as collusion!) There is also the auctioneer with his chatter, mile-a-minute delivery, and selling antics. The sale itself happens very rapidly. There are typically two to four bidders for a particular lot of animals, and the bids go back and forth among them at lightning speed. The bidding cues are highly personalized—one buyer uses the flip of his tally sheet, another raises his index finger, and one simply arches his eyebrow. In less than 45 seconds, the winning buyer has spent $27,000! And then the next lot appears. Cattle from this sale went to packing plants in Wisconsin, Iowa, Nebraska, and Illinois.
On the 25-mile ride home, my neighbor talked about how pleased he was with what had happened. His steers had gained well and had topped the market in terms of price at $1.57 per pound. He said that corn was very cheap, as was distiller’s grain—the high protein by-product from making corn-based ethanol—which is now an important part of cattle feeding rations. There would be a healthy profit from this load of steers that had grossed about $80,000.
But then he turned somber. What should he do about next year? The price of 600-pound calves that he would put into the feedlot for feeding and sale next year are selling at the astronomical price of $2.50 per pound and even higher. Perhaps next year, he said, was the year to stay out of the ring and go to Texas or Arizona for the winter. Risk had reared its ugly head once again. But my neighbor is first and foremost a cattle feeder, with a cattle feeder’s mindset toward risk. My conjecture is that he will somehow find a rationale for purchasing replacement calves, and that he will do everything all over again next year.
Electrical grids have long depended upon information infrastructures—systems for exchanging information about electricity generation, transmission, distribution, and use. But only in the last decade has the notion of a “smart grid” captured the imagination of policymakers, business leaders, and technologists. Smart grid promoters promise that information technology will simultaneously improve the efficiency, reliability, and security of the grid. This article shows how these goals have come into tension as the grid’s information infrastructure has shaped, and been shaped by, government policies. It advances a three-part argument. First, digital technology and digital utopianism played a significant and underanalyzed role in restructuring the electricity industry during the 1980s and 1990s. Second, industry restructuring encouraged utilities to deploy information technology in ways that sacrificed reliability, security, and even physical efficiency for economic efficiency. Third, aligning the many goals for a smart grid will require heterogeneous engineering—designing sociopolitical and technological worlds together.
We study the governance of public good provision in poor communities in Oaxaca, Mexico. We estimate the effect of usos y costumbres—a form of participatory democracy prevalent in indigenous communities—on the provision of local public goods. Because governance is endogenous, we address selection effects by matching on municipal characteristics and long-term settlement patterns. Using a first-differences design we show that these municipalities increase access to electricity, sewerage, and education faster than communities ruled by political parties. We also show they are places of vibrant political participation, not authoritarian enclaves protecting the political monopoly of local bosses.
East Africa is one of the epicenters of a vibrant, highly competitive, and quickly-growing industry that sells (on a commercial and for-profit basis) low-power solar energy products to consumers that traditionally cannot access electricity. Although this appears to be good news for the hundreds of millions of people that rely on kerosene and other traditional energy options, surprisingly little is known about east African solar energy customers and the development impacts of the solar products they use. This new study tracks a group of solar customers and products to uncover the needs and habits of consumers, the performance/reliability of products, and the impacts of business model innovations. We are in the early stages of data collection and will present early findings and next steps for the project, so feedback and ideas from the audience are especially welcome. We seek to identify the most promising niches for solar in East Africa from the perspectives of both solar businesses and their customers.
Frank A. Wolak is a Professor in the Department of Economics at Stanford University. His fields of specialization are Industrial Organization and Econometric Theory. His recent work studies methods for introducing competition into infrastructure industries -- telecommunications, electricity, water delivery and postal delivery services -- and on assessing the impacts of these competition policies on consumer and producer welfare. He is the Chairman of the Market Surveillance Committee of the California Independent System Operator for electricity supply industry in California. He is a visiting scholar at University of California Energy Institute and a Research Associate of the National Bureau of Economic Research (NBER).
Professor Wolak received his Ph.D. and M.S. from Harvard University and his B.A. from Rice University.
Director of the Program on Energy and Sustainable Development
Mark C. Thurber is Associate Director of the Program on Energy and Sustainable Development (PESD) at Stanford University, where he studies and teaches about energy and environmental markets and policy. Dr. Thurber has written and edited books and articles on topics including global fossil fuel markets, climate policy, integration of renewable energy into electricity markets, and provision of energy services to low-income populations.
Dr. Thurber co-edited and contributed to Oil and Governance: State-owned Enterprises and the World Energy Supply (Cambridge University Press, 2012) and The Global Coal Market: Supplying the Major Fuel for Emerging Economies (Cambridge University Press, 2015). He is the author of Coal (Polity Press, 2019) about why coal has thus far remained the preeminent fuel for electricity generation around the world despite its negative impacts on local air quality and the global climate.
Dr. Thurber teaches a course on energy markets and policy at Stanford, in which he runs a game-based simulation of electricity, carbon, and renewable energy markets. With Dr. Frank Wolak, he also conducts game-based workshops for policymakers and regulators. These workshops explore timely policy topics including how to ensure resource adequacy in a world with very high shares of renewable energy generation.
Dr. Thurber has previous experience working in high-tech industry. From 2003-2005, he was an engineering manager at a plant in Guadalajara, México that manufactured hard disk drive heads. He holds a Ph.D. from Stanford University and a B.S.E. from Princeton University.
Ognen Stojanovski has been affiliated with PESD since 2005 (while still a student at Stanford Law School) and returned to the program in 2012. He is charged with leading PESD’s research platform on low-income energy services, which studies the kinds of economic and institutional arrangements that can deliver modern energy services to the poor at scale and in a durable way (as opposed to whether a specific technology can be made to work on a one-off basis).
His current research focuses on measuring and quantifying the economic and social welfare impacts of solar PV products in developing countries, as well as identifying innovations in the off-grid solar industry that can improve business performance and maximize end-user benefits. He is also keenly interested in investigating the theory and practice of impact investing in social enterprises intended to both promote development and deliver financial returns. Stojanovski was previously part of PESD's research on national oil companies and authored the chapter on Pemex and the Mexican oil sector in the book Oil and Governance: State-owned Enterprises and the World Energy Supply.
Stojanovski has designed and carried out multiple randomized controlled trials (RCTs) and other field research projects in challenging environments. He has also been responsible for developing and maintaining relationships with both commercial and research partners that have enabled PESD to perform effective research in these settings. He authored successful research grant proposals to support this work.
Stojanovski developed the curriculum for Economics 121: “Social Science Field Research Methods,” a new course he has co-taught (along with Frank Wolak and Mark Thurber) since 2015. The course aims to equip students with strong foundations in research design and rigorous data analysis, along with the practical skills required for successful fieldwork implementation and project management. In the summer of 2015, he organized and led a group of selected students from the course to conduct an RCT in Puebla, Mexico. They explored how households use electricity and tested whether information about electricity pricing and conservation leads to changes in behavior.
Stojanovski’s research at the nexus of energy and development is motivated and informed by working, living, and traveling through over 20 developing countries in sub-Saharan Africa, central and eastern Europe, and South America for four years (October 2007-October 2011).
Additionally, Stojanovski has extensive experience in the autonomous vehicles industry, starting as a competitor in the first DARPA Grand Challenge while in graduate school in 2003-04. Most recently, he helped launch Otto (a startup later acquired by Uber) where he spearheaded policy, internal research, and external advocacy efforts. He developed the company’s policy position and compiled research probing the potential safety, fuel-efficiency, greenhouse gas emissions, and productivity benefits of self-driving commercial motor vehicles. He also organized and led a team undertaking a detailed econometric analysis on the possible impacts of this technology on the trucking labor market (available here).
Stojanovski has worked closely with policymakers, regulators and law enforcement at the federal, state, and international levels to develop and implement autonomous vehicle policies. He cleared a regulatory path forward for major milestones, including: (1) the first-ever commercial delivery by an autonomous truck ; (2) the first series of interstate shipments by (SAE level 2) self-driving trucks; and (3) the first framework for the development and testing of self-driving trucks in California. Stojanovski continues to actively advise on policy and legal issues related to autonomous vehicles.
Stojanovski has a background is in law and engineering. He received his J.D. from Stanford (with distinction) and also holds masters and bachelor’s degrees from UC Berkeley in Industrial Engineering and Operations Research (with highest honors). He is an active member of the State Bar of California and has advised clients on a wide range of corporate legal issues.
This paper summarizes the lessons learned from implementing a realistic, game-based simulation of California’s electricity market with a cap-and-trade market for greenhouse gas (GHG) emissions and fixed-price forward financial contracts for energy. Sophisticated market participants competed to maximize their returns under stressed (high carbon price) market conditions. Our simulation exhibited volatile carbon prices that could be influenced by strategic behavior of market participants. General uncertainty around carbon price as well as the deployment of strategies that were privately profitable but adversely affected overall market efficiency resulted in total costs of electricity supply that were significantly higher than would have been observed in perfectly competitive allowance and electricity markets.
We observed several striking phenomena in our game. First, all teams in our game found themselves in a position to prefer higher carbon prices, even those holding high-emitting power plants. This occurred both because electricity price rose faster with carbon price than the average variable cost of producing output for most teams and because the initial allowance allocations functioned as “free money” with a face value that could be increased through the unilateral actions of market participants. Second, teams exercised unilateral market power on both selling and buying sides of the carbon allowance market, with the net effect being a carbon price far above that which would have been expected based on allowance supply and demand in a perfectly competitive market. Third, disagreement among teams over the appropriate price of carbon allowances combined with the exercise of unilateral market power in both electricity and allowance markets dramatically increased electricity prices and often resulted in the use of a more expensive set of generation units to produce the electricity demanded. Numerous authors have pointed out that electricity markets are extremely susceptible to the exercise of market power, and emissions allowance markets can exacerbate this problem, as demonstrated in Kolstad and Wolak (2008). Fourth, there was very little liquidity in the secondary market for carbon allowances until right before the final emissions “true-up,” with a flurry of trading at the last minute, which resulted in inefficient market outcomes as several trades failed to be completed before the deadline.
These findings have several important policy implications. First, policy measures that increase the transparency and liquidity of the carbon allowance market would make both the allowance market and the electricity market work better. In our simulation, all market participants showed a strong unilateral desire to limit the amount of information publicly available about conditions in the carbon market, much to the detriment of market performance. Second, guardrails that constrain market outcomes, such as price floors and ceilings, can play a valuable role by limiting carbon price volatility. Third, position and holding limits can reduce the ability and incentive of market participants to attempt strategies that, while privately profitable, have a negative impact on overall market efficiency.
We compare the cost of generating electricity with coal and wind in Chile’s Central Interconnected System (SIC). Our estimates include the cost of marginal damages caused by coal plant emissions.
On average, we estimate that the levelized cost of coal, including externalities, is $84/MWh. It is efficient to abate emissions of air pollutants (SOx, NOx and PM2.5) but not of CO2. Then the cost wrought by environmental externalities equals $23/MWh, or 27% of total cost. Depending on the price of coal, the levelized cost of coal may vary between $72 and $99/MWh.
The levelized cost of wind is $144/MWh with capacity factors of 24%. This cost includes the cost of backup capacity to maintain acceptable loss of load probability (LOLP), which equals $13/MWh or 9% of total cost. The levelized cost of wind varies between $107/MWh with capacity factors of 35% to $217/MWh with capacity factors of 15%.
We conclude that wind is competitive only when it achieves capacity factors around 35% and coal prices are very high. So far the average annual capacity factor achieved by existing wind farms in Chile has been less than 20%, which suggests why wind has developed only slowly.
The levels of violence in Mexico have dramatically increased in the last few years due to structural changes in the drug trafficking business. The increase in the number of drug trafficking organizations (DTOs) fighting over the control of territory and trafficking routes has resulted in a substantial increase in the rates of homicides and other crimes. This study evaluates the economic costs of drug-related violence. We propose electricity consumption as an indicator of the level of municipal economic activity and use two different empirical strategies to test this. To estimate the marginal effect of violence in the rate of homicides (per 100,000 inhabitants) we use an instrumental variable regression created by Mejía, Castillo and Restrepo (2012). For the average municipality, the marginal negative effect of the increase in homicides rates is substantive for earned income and the proportion of business owners, but not for energy consumption. Although negative and statistically significant, the effects are mild for labor participation. We also employ the methodology of synthetic controls to evaluate the effect that inter-narco wars have on local economies. The analysis indicates that the drug wars in those municipalities that saw dramatic increases in violence between 2006 and 2010 significantly reduced their energy consumption in the years after the change occurred, which is interpreted as a significant reduction in GDP per capita for these municipalities.
Speaker Bio:
Gabriela Calderon holds a Ph.D. in Economics from Stanford University. Her research interests include policies that affect gender differences in developing countries, policy evaluation, violence in Latin America and the effect of institutions and governance on the provision of public goods and health/education outcomes. She did her master's degree in economic theory and bachelor's degree in economics at the Instituto Tecnológico Autónomo de México. Currently, in the Program on Poverty and Governance, her research analyzes the way institutions and democracy affect the provision of public goods, and the impact they have on health outcomes like infant mortality trends. She is also studying the effects of government interventions that combat drug-trafficking organizations over violence in Mexico.
Her research has focused on the topics of development, public finance, and the evaluation of public policy programs in Mexico. For example, during the summers of 2009/2010, she conducted a field experiment in Zacatecas, Mexico with Giacomo de Giorgi, an assistant professor from Stanford University, and Jesse Cuhna, a former Stanford student. The main task was to evaluate the impact of financial literacy classes on underprivileged women entrepreneurs in the region. To successfully complete an evaluation in an untreated region, they proposed collaborating with the Mexican NGO CREA on a joint project. They contacted local interviewers, trained them, and identified all women entrepreneurs in the 17 communities, in which we conducted the experiment. Preliminary results suggest that the female entrepreneurs who were randomly assigned to treatment earned higher profits, had larger revenues, and served a greater number of clients. They also found that they were more likely to implement formal accounting techniques.
She has also studied programs that are not randomly assigned as an experiment. For example, she has analyzed the effects of a national policy in Mexico of child care services, called Estancias Infantiles para apoyar a Madres Trabajadoras (EI), using administrative, census and household data. Her empirical research strategy identifies the effects of the program on both the men and women who were eligible for the program. She used time, location and eligibility variation, and considered a major threat to identification of the actual effects: for example, a manufacturer who moves into a municipality at approximately the same time as the EI program and who happens to disproportionately demand the skills of women who were eligible to the program happened to have. To ensure that such scenarios do not affect her results, she chose not triple difference strategy, in which all ineligible people are treated as “controls” for the EI-eligible families. Instead, she employs Synthetic Control Methods, using the same methodology as Abadie and Gardeazabal (2003) and Abadie, Diamond and Hainmueller (2010) to ensure that her control group has the same mix of skills and preferences as the EI-eligible group. She adapted the Synthetic Control Method to analyze repeated cross-sectional household data, which are data that are typically available in developing countries
Gabriela Calderon holds a Ph.D. in Economics from Stanford University. Her research interests include policies that affect gender differences in developing countries, policy evaluation, violence in Latin America and the effect of institutions and governance on the provision of public goods and health/education outcomes. She did her master's degree in economic theory and bachelor's degree in economics at the Instituto Tecnológico Autónomo de México. Currently, in the Program on Poverty and Governance, her research analyzes the way institutions and democracy affect the provision of public goods, and the impact they have on health outcomes like infant mortality trends. She is also studying the effects of government interventions that combat drug-trafficking organizations over violence in Mexico.
Her research has focused on the topics of development, public finance, and the evaluation of public policy programs in Mexico. For example, during the summers of 2009/2010, she conducted a field experiment in Zacatecas, Mexico with Giacomo de Giorgi, an assistant professor from Stanford University, and Jesse Cuhna, a former Stanford student. The main task was to evaluate the impact of financial literacy classes on underprivileged women entrepreneurs in the region. To successfully complete an evaluation in an untreated region, they proposed collaborating with the Mexican NGO CREA on a joint project. They contacted local interviewers, trained them, and identified all women entrepreneurs in the 17 communities, in which we conducted the experiment. Preliminary results suggest that the female entrepreneurs who were randomly assigned to treatment earned higher profits, had larger revenues, and served a greater number of clients. They also found that they were more likely to implement formal accounting techniques.
She has also studied programs that are not randomly assigned as an experiment. For example, she has analyzed the effects of a national policy in Mexico of child care services, called Estancias Infantiles para apoyar a Madres Trabajadoras (EI), using administrative, census and household data. Her empirical research strategy identifies the effects of the program on both the men and women who were eligible for the program. She used time, location and eligibility variation, and considered a major threat to identification of the actual effects: for example, a manufacturer who moves into a municipality at approximately the same time as the EI program and who happens to disproportionately demand the skills of women who were eligible to the program happened to have. To ensure that such scenarios do not affect her results, she chose not triple difference strategy, in which all ineligible people are treated as “controls” for the EI-eligible families. Instead, she employs Synthetic Control Methods, using the same methodology as Abadie and Gardeazabal (2003) and Abadie, Diamond and Hainmueller (2010) to ensure that her control group has the same mix of skills and preferences as the EI-eligible group. She adapted the Synthetic Control Method to analyze repeated cross-sectional household data, which are data that are typically available in developing countries
Two black angus calves.