I am a Ph.D. candidate in the department of agricultural economics at Purdue University. My research interests are in the intersection between applied theory of industrial organization in agricultural markets, econometrics, and experimental economics. Particularly, I dedicate my research time thinking about how misperception of quality labels can alter incentives for firms to provide higher quality food products. More recently, I started thinking about how adoption of technologies can impact resource use in agricultural production.
I am currently available for interviews.
Ph.D. in Agricultural Economics, Expected 2021
Purdue University
M.S. in Agricultural Economics, 2016
Purdue Unviersity
Bachelor's in Economics, 2014
Universidade Federal de Minas Gerais, Brazil
Abstract: Information-based policies, most prominently labels, reveal credence attributes of food products and, presumably, help consumers make better choices by reducing their misperception of product quality. However, much remains unexamined regarding how firms’ strategic reactions to consumers’ misperception of quality influence the benefits of information-based policies. We consider an oligopoly model where heterogeneous consumers can over- or under-estimate the quality of products in the market, and firms choose quality and prices conditional on consumers’ perception of quality. We find that under plausible conditions misperception can increase efficiency in relation to the perfect information case; it does so if 1) it strengthens firms’ incentives to provide higher quality, countervailing the chronic underprovision of quality that prevails under perfect information or 2) it galvanizes competition, reversing another deleterious effect of product differentiation, namely high quality-adjusted markups that restrain commerce. Our results imply that information-based policies aimed at curbing misperception (including stricter labeling policies, nudging, changes in labeling format) can have deleterious effects on efficiency and, perhaps more importantly, hurt the consumers they mean to protect.
Abstract: The size and distribution of surplus in markets where credence quality attributes of goods are conveyed through some informational mechanism (typically labels) crucially depend on 1) how information changes consumers’ perception of quality and 2) producers’ strategic choice of quality provision in response to changes in consumers’ perception of quality. While there is a growing empirical literature on consumers’ perception of quality, there is a dearth of empirical studies regarding firms’ reactions to changes in consumers’ perception of quality. A major reason underlying this dearth of empirical studies is that consumers’ perceived, as opposed to actual‒quality, is unobservable to the researcher. Based on previously derived theoretical predictions, I design an experiment in the laboratory where I emulate changes in consumers’ perception of quality and examine their effects on producer’s provision of quality and market surplus. Preliminary results indicate that moderate overvaluation of high-quality goods relative to their lower-quality competitors (e.g. 100% organic relative to organic or made with organic) results in a significant increase in quality at the higher end of spectrum, and ambiguous changes in quality at the lower end. We expect to further evaluate these results for a wider range of shocks to consumers’ perception.
Abstract: In food markets, government-sponsored quality labels are used extensively to communicate credence attributes to consumers. Is expanding quality gradation (certifying a larger number of qualities along the spectrum) socially desirable? This is an important question in light of administrative costs typically associated with such expansion. Expanding quality gradation may increase welfare by providing consumers with more options, but it may also erode welfare by allowing firms to increase differentiation and soften price competition. We explore this possibility by leveraging on the quality gradation imposed by the USDA’s Organic Certification program as a case of study. Using scanner-data of ground coffee purchases, we estimate a two-stage structural econometric model which identifies demand for quality grades and firms fixed and variable cost structure. We then exploit these structural estimates to generate gradation counterfactuals and examine the market and welfare effects of shrinking or expanding quality gradation. Preliminary results indicate that shrinking gradation may result in only moderate welfare losses which, in combination with administrative costs associated with additional gradations, may actually result in welfare gains. An important qualification of this result is that welfare gains are conditional on firms not exiting the market, something our data on the coffee market seems to support but need not be true of other markets.
Working paper coming soon