Research

Working papers (please email for latest draft) :

Impact of Air Passenger Protection Regulations on Airfares: Evidence from the Canadian Market (submitted)

Abstract:  This study examines the effects of the new Air Passenger Protection Regulations (APPR) introduced by the Canadian Transportation Agency (CTA) in September 2022 on airfares. Using data from the Official Airlines Guide (OAG) and employing a combination of nearest-neighbor matching and two-way fixed effects (TWFE), we find that the new APPR effectively reduced airfares on affected routes by 8\% on average, with further reductions observed using alternative empirical approaches. The policy change primarily impacted Canadian airlines, while international carriers showed minimal fare adjustments. Our findings suggest that well-designed regulatory interventions, especially in the air travel industry, can positively influence market outcomes, benefiting consumers without significantly disrupting market dynamics. Other implications and potential avenues for future research are also discussed.

Popularity Bias in Anonymous Matching Markets: Efficiency, Errors, and Fake Views (with Roland Pongou)

Abstract: Popularity bias -- the tendency to make choices that are more popular -- is a widespread behavior. We incorporate this bias into a dynamic model of an anonymous bipartite economy with heterogeneous agents, where each agent primarily cares about obtaining her optimal number of partners. We provide a full characterization of steady state matchings in terms of the allocation of links between the two sides of the economy. These matchings, which feature a small number of hubs on the long side, refine the set of matchings that form in the absence of bias, but they are not efficient in general, despite agents being rational. When irrationality (or the possibility of mistakes) in the creation and severance of links is allowed, popularity bias leads to a further refinement, as only efficient matchings remain in the long run. In addition, we uncover structural conditions under which steady state matchings are efficient in the absence of mistakes. We discuss empirical implications for competition and link our findings to the "Matthew effect", market share inequality, and to the emerging industry of "fake" views and reviews on social media.

Social Interactions and the Demand for Financial Advice (with Roland Pongou)

Abstract: Social interactions - effects of the group on an individual - have been found to impact a wide range of outcomes and decisions; but they have, to this point, not being taken into account in the modeling of the decision to consult a professional on financial matters. Using data from the 2009 version of the Canadian Financial Capability Survey, this study investigates the presence of group effects in the decision to seek financial counsel from a professional advisor and make use of the received advice. Neighborhood trends are found to significantly impact the individual propensity to make use of financial advice, especially when individuals are sorted by the first two digits of their postal code. In contrast, social effects on the decision to consult a professional are not statistically different from 0. Investigation into heterogeneous effects by gender, age, education, and immigrant status point to homophily as the main mechanism behind these positive social interaction effects: individuals simply respond more noticeably to the actions of peers who share similar characteristics. Implications and policy relevance of these findings are discussed.

Social networks, adoption of sustainable agricultural practices, and farm income (with Ana C. Dammert and Jose Galdo) 

Abstract:  This paper examines the role of social networks on the adoption of agricultural sustainable practices and net income among Fairtrade coffee farmers in Peru. We use both administrative census and survey data to estimate two network measures, the number of peers within the cooperative who nominate a producer, and the number of peers the producer nominates, the former is considered a measure of a producer’s popularity. Results show statistically significant effects equivalent to a 5.4% increase in adopting agricultural sustainable practices for every additional nomination received. This result is mirrored by positive effects on farmers’ net income, equivalent to 7.6% for every additional nomination received. Length of affiliation to the Fairtrade cooperative and participation in training and agricultural extension services offered by the Fairtrade cooperative stand out as meaningful predictors of network size across both network measures.