Martín A. Rossi

On the Regulatory Application of Efficiency Measures

The last decade has witnessed a change to more powerful incentive schemes and the adoption by a large number of regulators of some form of price cap regimes. The efficiency frontiers literature tackles the problem of measuring the X factor in a price cap regime with an RPI-X rule. However, that literature has by large focused solely on the theoretical aspects involved in the estimation of an efficient frontier. The empirical application of the theoretical concepts (which is the main interest of regulators) has not yet received equal attention. In this paper we address this issue and try to elaborate upon the applied aspects of efficiency measurement.

Regulatory Agencies: Impact on Firm Performance and Social Welfare

The authors explore the relation between the establishment of a regulatory agency and the performance of the electricity sector. The authors exploit a unique dataset comprising firm-level information on a representative sample of 220 electric utilities from 51 development and transition countries for the years 1985 to 2005. Their results indicate that regulatory agencies are associated with more efficient firms and with higher social welfare.

The Impact of Electricity Sector Privatization on Public Health

This paper uses provincial-level data for Argentina to test for the causal relationship between electricity distribution and health. It examines the impact of privatization on two output measures: incidence of low birth weight and child mortality rates caused by food poisoning. Privatization improves service coverage which, through the use of refrigerators, may improve nutritional intake. Privatization also results in a reduction in the frequency of interruptions, and thus may reduce the likelihood of food poisoning. Though the evidence indicates that privatization reduced the frequency of low birth weight and child mortality rates caused by food poisoning, the results are not strong enough to inform the policy debate with respect to the benefits of privatization for the welfare of the poor.

Self-perpetuation of Political Power

I investigate the relationship between tenure length in the House and posterior political success. I exploit a natural experiment in the Argentine Congress – where terms length were assigned randomly after the return to democracy – that provides a source of exogenous variation to initial political power. I find that having a longer tenure in the House increases both the probability of moving to higher political positions and the probability of having a relative in future congresses. I also find that name recognition is a mechanism behind dynastic success. Finally, I report a negative correlation between being a dynastic legislator and political effort.

Conscription and Crime

The initiation in criminal activities is, typically, a young phenomenon. The study of the determinants of entry into criminal activities should pay attention to major events affecting youth. In many countries, one of these important events is mandatory participation in military service. The objective of this study is to estimate the causal relationship between mandatory participation in military service and crime. The authors exploit the random assignment through a draft lottery of young men to conscription in Argentina to identify this causal effect. Their results suggest that participation in military service increased the likelihood of developing a criminal record in adulthood (in particular, for property and weapon-related crimes).

PEER PRESSURE: EXPERIMENTAL EVIDENCE FROM RESTROOM BEHAVIOR

We provide experimental evidence on the effect of peer pressure on individual behavior. Specifically, we study the effect of being exposed to an observer in a public restroom on handwashing and urinal flushing behavior. Our estimates show that being exposed to an observer increases the probability of handwashing by 13 percentage points and the probability of urinal flushing by 15 percentage points. Given that handwashing and urinal flushing have social benefits that exceed individual benefits, our findings provide support for peer pressure as an additional way of addressing the social suboptimality arising from externalities. (JEL C91, C93)

The Effects of Real Exchange Rate Fluctuations on the Gender Wage Gap and Domestic Violence in Uruguay

In this paper, we bring to light the experiences resulting from the significant depreciation of the Uruguayan real exchange rate between 2002 and 2003, followed by an equally considerable appreciation between 2004 and 2010. We explore the link between these fluctuations and the incidence of domestic violence taking place in Uruguay. The real exchange rate is a measure of the relative price between tradable and nontradable goods. While men are traditionally employed in tradable industries, such as manufacturing, women are more likely to work in nontradable industries, such as the service sector. A change in the real exchange rate, therefore, can affect the potential wages of men differently from those of women. In line with the models that represent household bargaining, an increase in the real exchange rate can generate an increase in the bargaining power of men relative to that of women within the household. We present evidence that it raises the frequency of domestic violence. This holds true in rich and poor areas of the city.

Legislative Effort and Career Paths in the Argentine Congress

This paper uses data from the Argentine House of Representatives to study the relationship between legislative effort and political success, as measured by reelection, becoming a leader of the House, and moving to higher political positions. It is found that more effort is associated with a higher probability of being reelected, and also that for those legislators that are reelected, higher effort is positively associated with acquiring leadership positions in the House. This happens in a context of fairly high legislative turnover and in a political context in which career paths of legislators are largely dictated by provincial party leaders. Interestingly, it is found that higher legislative effort is associated with a lower probability of improving politically outside Congress. These findings suggest the presence of various alternative career paths for Argentine politicians, and some degree of sorting. The paper concludes with some speculation on these politician types and with ideas for further research.