Working Papers

“Multinationals, Monopsony and Local Development: Evidence from the United Fruit Company”

with Diana Van Patten

This paper studies the short- and long-run effects of large firms on economic development. We use evidence from one of the largest multinationals of the 20th Century: The United Fruit Company (UFCo). The firm was given a large land concession in Costa Rica—one of the so-called "Banana Republics"—from 1899 to 1984. Using administrative census data with census-block geo-references from 1973 to 2011, we implement a geographic regression discontinuity (RD) design that exploits a quasi-random assignment of land. We find that the firm had a positive and persistent effect on living standards. Regions within the UFCo were 33% less likely to be poor in 1973 than nearby counterfactual locations, with only 59% of the gap closing over the following four decades. Company documents explain that a key concern at the time was to attract and maintain a sizable workforce, which induced the firm to invest heavily in local amenities that likely account for our result. Consistent with this mechanism, we show, empirically and through a proposed model, that the firm's welfare effect is increasing in worker mobility.

Media Coverage: Marginal RevolutionFrankfurter Allgemeine, Cato Institute7-minute summary video by Econimate.

Work in Progress

“Selecting Between Public and Private Healthcare”

with Jason SomervilleMatthew Thirkettle

This paper investigates how the universal provision of free public healthcare generates selection in to and out of private health insurance markets. In a theoretical model, we show that public healthcare generates a unique channel of selection in private markets: the ex-post decision of whether to receive private or public care after a health shock. Unlike traditional channels of selection, the possibility of seeking public treatment after an accident drives individuals to buy less insurance. This implies that greater levels of moral hazard, adverse selection, or risk aversion are required to justify selection into high-coverage private plans. We investigate this novel selection channel empirically using data from a health insurance firm located in a Latin American country that operates alongside a free universal public healthcare system. We find high levels of asymmetric information in this market: claim rates are ten times higher in the highest coverage plan relative to the lowest coverage plan. We formally show that our structural model is identified from variation in copays and deductibles. We disentangle the various channels of selection by estimating the structural parameters of our model using variation in copays and deductibles implemented by the insurance company over time.

“Foreign Investment, Productivity Spillovers and Environmental Effects: Evidence from the United Fruit Company”

with Diana Van Patten

Research Publications

Probabilidad de corrección súbita de cuenta corriente para Costa Rica: un enfoque de análisis de supervivencia

with Jorge León Murillo

Revista de Ciencias Económicas, 2016, 34(2): 103-132

El acceso al crédito para microempresas en Alajuela, Cartago y Heredia​

with Rodrigo Villalta Díaz

Revista de Ciencias Económicas, 2012, 30(2): 247-271

Análisis de factores determinantes en el precio de servicios de trabajo sexual femenino según el estudio de asistentes a Asociación La Sala 

with Rodrigo Villalta Díaz

Revista de Ciencias Económicas, 2012, 30(1): 293-304