Research in Progress

The effect of entry on price. Evidence from the retail gasoline market -[Job market paper] – (Submitted)

Abstract: I exploit a change in Spanish regulations to test the effect of entry restrictions on retail gasoline equilibrium prices. In February 2013, a Central Government reform allowed gasoline stations to operate in industrial and commercial areas. This deregulation led to a high number of new market entrants over the following two years in these newly designated free entry areas. By isolating markets exposed to entry and markets not affected by new entrants, and using a difference-in-difference approach, gasoline retail prices are found to fall on average by 1.82% in the free entry areas. This result is economically significant, representing one fifth of the average retail margin. Moreover, if adopted by every gasoline station, the price reduction would imply savings in gasoline expenditure alone of around 274 million euros per year. Additionally, the results show that the equilibrium price reduction is greatest when the entrant is unbranded and that the effect decreases with the number of entrants and over time.

 

Residential water demand: evidence from monetary and non-monetary policies (In progress)

Abstract: This article intends to assess the effectiveness of monetary and non-monetary policies in managing residential water demand. To do this, I exploit micro data from Castelldefels during the period 2004-2014. This is a municipality with a high proportion of houses with garden and swimming pools, whose users passed both a drought period and the introduction of two extra blocks in an increasing blocks tariff system. By applying a regression discontinuity (RD) design approach, preliminary results show that a 68% in average price increase reduces consumption in about 10.35% implying an elasticity of 0.15. Also, that non-monetary policies affect a wider population.