Learning, Externalities, and Export Dynamics
Abstract: This paper presents a model of exporting with demand uncertainty where incumbents reveal signals about a shared component of demand that potential entrants use to update beliefs. Using Chilean export data, signals are estimated and used to examine the effects of information on entry into new markets, quantity of output sold, and duration of exporting. A one-standard-deviation-increase in signals by incumbents is associated with 6.3% higher entry rates, 11.7% larger first-year export volumes, and 0.6% longer duration. Information spillovers are larger in distant countries, in countries where Spanish is not an official language, for homogeneous products, and for larger firms.
JEL Classifications: D83, F14, L15
Keywords: Uncertainty, learning about demand, export dynamics, spillovers
Forthcoming in Research in Economics, https://www.sciencedirect.com/science/article/abs/pii/S1090944323000595
ExportLearning.pdfTwo Steps Forward, One Step Back?
Quantifying the Pecuniary Costs of Debt Account Aversion and the Debt Snowball
Southern Economic Journal, https://onlinelibrary.wiley.com/doi/full/10.1002/soej.12612
For households with multiple debts, the interest-minimizing strategy to pay those debts off is to make minimum payments on all debts and allocate remaining funds to the debt with the highest interest rate. However, cognitive biases such as debt account aversion and popular financial advisors encourage borrowers, once minimum payments are made, to allocate all available funds to the debt with the lowest outstanding balance, a strategy known as the Debt Snowball. The author uses the 2016 Survey of Consumer Finances to quantify the pecuniary costs for American households for following the Debt Snowball strategy, thereby focusing on the "quick victories" of paying off smaller debts sooner instead of minimizing accrued interest costs. The average household would pay an additional 1.8% to 4.3% in interest costs by prioritizing minimizing interest costs instead. Due to differences in the structure of household debt, adhering to the Debt Snowball imposes greater pecuniary penalties on low-income households, on Black households, and on households with a greater number of initial debts.
JEL Classifications: D14, G41, G51
Keywords: Personal finance, debt repayment, consumer debt
Link: https://drive.google.com/file/d/1AtpWkTQ4MHIsqgVZ7SdU974ZGRLu_dmg/view?usp=sharing
DebtSnowball031122.pdfGravity in the Beautiful Game:
Labor Market Liberalization and Football Migration
Forthcoming in Open Economies Review, https://link.springer.com/article/10.1007/s11079-023-09733-6
Until 1996, mobility costs for football players in Europe were high. Clubs retained rights to players when their contracts expired and were able to prevent free agents from signing with new clubs. In a 1995 verdict known as the “Bosman Ruling," the European Court of Justice determined that the rules governing player transfers between clubs violated the Treaty of Rome provision of labor mobility across European Union countries and must be revised, reducing the requirements players must meet to change clubs. This paper makes two contributions. First, it estimates a gravity model of bilateral player migration flows and stocks using a Poisson Pseudo Maximum Likelihood estimator, obtaining results similar to international trade: players are more likely to move to a league that is closer to their native country, one where their native language is spoken, and one where their compatriots also compete. Second, it finds that the measured effect of distance on depressing migration flows fell by about one-third of its pre-Bosman level after the 1995 ECJ ruling.
JEL Classifications: F22, J61, Z28
Keywords: Gravity, international migration, trade barriers
Link: https://drive.google.com/file/d/18klz0wY7pUAMzwTK5FvpygLT_atQqiYN/view?usp=sharing
2021Draft.pdfWorks in Progress:
Import Sourcing and Learning from Others
Import-Export Complementarity
HamiltonITC01052023.pdfHamiltonITC01052023Large.pdf