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Working Paper
Should the government sell you goods? Evidence from the milk market in Mexico
Governments spend considerable resources providing goods directly. We show that such behavior may increase welfare when private suppliers have market power. We do this by studying the staggered rollout of hundreds of government milk “ration stores” in Mexico using a proprietary panel of household food purchases. The rollout lowered the price per liter of privately supplied milk by 2.4% and increased household consumption. To compare directprovision with budget-neutral alternatives, we develop and estimate an equilibrium model of the market that accounts for quality differences. Direct ...
Working Paper
Data, Privacy Laws and Firm Production: Evidence from the GDPR
By regulating how firms collect, store, and use data, privacy laws may change the role of data in production and alter firm demand for information technology inputs. We study how firms respond to privacy laws in the context of the EU’s General Data Protection Regulation (GDPR) by using seven years of data from a large global cloud-computing provider. Our difference-in-difference estimates indicate that, in response to the GDPR, EU firms decreased data storage by 26% and data processing by 15% relative to comparable U.S. firms, becoming less “data-intensive.” To estimate the costs of the ...