My research statement is available here.

publications

Financial Technology Adoption: Network Externalities of Cashless Payments in Mexico. American Economic Review 114(11), 3469–3512, 2024.

  • Abstract

    Do coordination failures constrain financial technology adoption? Exploiting the Mexican government's rollout of 1 million debit cards to poor households from 2009--2012, I examine responses on both sides of the market, and find important spillovers and distributional impacts. On the supply side, small retail firms adopted point-of-sale terminals to accept card payments. On the demand side, this led to a 21% increase in other consumers' card adoption. The supply-side technology adoption response had positive effects on both richer consumers and small retail firms: richer consumers shifted 13% of their supermarket consumption to small retailers, whose sales and profits increased.

  • Paper PDF – Online Appendix – presentation slides – replication package
  • Summary: VoxDev; IPA; World Bank Development Impact Blog
  • Video: SFS Cavalcade (25 minute presentation, plus discussion and Q&A)
  • Media coverage: Kellogg Insight
  • Best Paper in Corporate Finance, SFS Cavalcade North America
  • PBCSF Award for the Best Paper in FinTech, WFA
  • Best Paper Award, GSU-RFS FinTech Conference

How Debit Cards Enable the Poor to Save More (with Pierre Bachas, Paul Gertler, and Enrique Seira). Journal of Finance 76(4), 1913-1957, 2021.

  • Abstract

    We study an at-scale natural experiment in which debit cards were given to cash transfer recipients who already had a bank account. Using administrative account data and household surveys, we find that beneficiaries accumulated a savings stock equal to 2% of annual income after two years with the card. The increase in formal savings represents an increase in overall savings, financed by a reduction in current consumption. There are two mechanisms. First, debit cards reduce transaction costs of accessing money. Second, they reduce monitoring costs, which led beneficiaries to check their account balances frequently and build trust in the bank.

  • Paper PDF – Online Appendix – replication package
  • Summary: VoxDev
  • Media coverage: Kellogg Insight; Market Watch

Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion (with Pierre Bachas, Paul Gertler, and Enrique Seira). American Economic Association Papers & Proceedings 108, 444-448, 2018.

  • Abstract

    Debit cards reduce the travel distance to access bank accounts and can increase financial inclusion. We show that in Mexico, cash transfer beneficiaries who already received their transfers in bank accounts and subsequently received debit cards reduce their median distance to access the account from 4.8 to 1.3 kilometers. They also report being less likely to forgo important activities (childcare, work) to withdraw their transfers. Using account level data, we find a strong correlation between the reduction in travel distance and financial activity: beneficiaries facing the largest reductions in distance increase both their number of withdrawals and their savings balances.

  • Paper PDF – replication package
  • Summaries of AEA session I organized: CEGA; NYU Wagner Financial Access Initiative

Can a Poverty-Reducing and Progressive Tax and Transfer System Hurt the Poor? (with Nora Lustig). Journal of Development Economics 122, 63-75, 2016.

  • Abstract

    To analyze anti-poverty policies in tandem with the taxes used to pay for them, comparisons of poverty before and after taxes and transfers are often used. We show that these comparisons, as well as measures of horizontal equity and progressivity, can fail to capture an important aspect: that a substantial proportion of the poor are made poorer (or non-poor made poor) by the tax and transfer system. We illustrate with data from seventeen developing countries: in fifteen, the fiscal system is poverty-reducing and progressive, but in ten of these at least one-quarter of the poor pay more in taxes than they receive in transfers. We call this fiscal impoverishment, and axiomatically derive a measure of its extent. An analogous measure of fiscal gains of the poor is also derived, and we show that changes in the poverty gap can be decomposed into our axiomatic measures of fiscal impoverishment and gains.

  • Paper PDF – replication package
  • Media coverage: Washington Post

working papers

Using Lotteries to Attract Deposits (with Paul Gertler, Aisling Scott, and Enrique Seira). NBER Working Paper 31529. Revise and resubmit, Journal of Finance.

  • Abstract

    Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits. In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 36% increase in the number of accounts opened and a 21% increase in the number of deposits during the lottery months. Nearly all new accounts (96%) were opened by households previously unbanked at any bank. The temporary two-month incentive had a persistent 2-3 year impact on the flow of deposits and stock of savings, and increased the present value of branch profits by 6%.

  • Summary: VoxDev; VoxEU
  • Media Coverage: Kellogg Insight
  • RCT registration

FinTech Lending to Borrowers with No Credit History (with Laura Chioda, Paul Gertler, and Paolina Medina). Revise and resubmit, Journal of Financial Economics.

  • Abstract

    Despite the promise of FinTech lending to expand access to credit to populations without a formal credit history, FinTech lenders primarily lend to applicants with a formal credit history and rely on conventional credit bureau scores as an input to their algorithms. Using data from a large FinTech lender in Mexico, we show that alternative data from digital transactions through a delivery app are effective at predicting creditworthiness for borrowers with no credit history. We also show that segmenting our machine learning model by gender can improve credit allocation fairness without a substantive effect on the model's predictive performance.

Search and Negotiation with Biased Beliefs in Consumer Credit Markets (with Erik Berwart, Sheisha Kulkarni, and Santiago Truffa).

  • Abstract

    How do inaccurate beliefs about the distribution of interest rates affect search and outcomes in consumer credit markets? In collaboration with Chile's financial regulator, we conducted a randomized controlled trial with 112,063 loan seekers where we showed treated participants a price comparison tool that we built using administrative data on the universe of consumer loans merged with borrower characteristics. The tool shows loan seekers a conditional distribution of interest rates based on similar loans obtained recently by similar borrowers. We find that consumers thought interest rates were lower than they actually were, and the price comparison tool caused them to increase their expectations about the interest rate they would obtain by 56%. Consumers also underestimated price dispersion, and our price comparison tool caused them to increase their estimates of dispersion by 69%. The price comparison tool did not cause people to search or apply at more institutions, but it did cause them to be 39% more likely to negotiate with their lender, to receive 14% more offers and 11% lower interest rates, and to be 5% more likely to take out a loan. We also cross-randomized whether we asked participants their beliefs about the distribution of interest rates, and find that merely asking these questions led them to search at 4% more institutions and obtain 9% lower interest rates.

  • Summary: IPA
  • RCT registration

Why Small Firms Fail to Adopt Profitable Opportunities (with Paul Gertler, Ulrike Malmendier, and Waldo Ojeda).

  • Abstract

    Why do small firms often fail to adopt new profitable opportunities? We explore a setting in which standard economic frictions are removed but many firms still do not adopt a profitable opportunity, and study three other frictions: limited memory, present bias, and a lack of trust in other firms. In partnership with a financial technology (FinTech) payments company in Mexico, we randomly offer 33,978 firms that are already users of the payment technology the opportunity to be charged a lower merchant fee for each payment they receive from customers. The median value of the fee reduction is 3% of total firm profits. We randomly vary the size of the fee reduction, a deadline, a reminder, and advance notice of the reminder. A deadline does not affect take-up for the larger firms in our sample, which implies limited or no present bias for these firms, while a deadline does increase take-up by 8% for smaller firms. Reminders increase take-up by 15%, and announced reminders by an additional 7%. Survey data help identify trust as the likely underlying mechanism behind the larger effect of the announced reminder: receiving an announced reminder increases firms' perceptions of the offer's value, and its treatment effect on take-up is stronger among firms that generally distrust advertised offers.

  • RCT registration

Towards a Cashless Economy? Evidence from the Elasticity of Cash Deposits of Mexican Firms (with Pierre Bachas and Anders Jensen).

  • Abstract

    The transition from cash to traceable transaction technologies promises to reduce tax evasion and illegal flows. Should governments actively encourage this transition by making cash more costly to use? We study a policy in Mexico which sought to limit cash usage by taxing the flow of new cash deposited into bank accounts. Using the tax exemption threshold and firm level bank account data, we create variation in exposure to the tax based on firms' pre-tax intensity of cash reliance. We find that the flow of cash deposits is highly elastic to the tax rate: a 1% tax leads to a 60% reduction in cash deposits. This drop in cash deposits arises principally from a reduction in total bank deposits rather than substitution towards other transaction technologies. Thus policies which impact the cost of cash through banks have large efficiency costs and appear ineffective at accelerating the adoption of digital payments.

  • Slides

Government-Backed Loans Enable Small Businesses to Maintain Employment during Cash Flow Shocks (with Paul Gertler, Ana María Montoya, Eric Parrado, and Raimundo Undurraga). Email for draft.

work in progress

Impacts of a Consumer Credit Platform on Competition and Credit Terms (with Xavier Giné, Dean Karlan, and Jonathan Zinman). Piloting under way.