I am Postdoctoral Scholar at the Gilbert Center at UC Berkeley

I am an applied microeconomist and my research focuses on the study of firms and education policy, with special emphasis on Latin America.

I completed my PhD at Stanford in June 2022, and I will join Columbia University as an Assistant Professor of Economics in the summer of 2023. You can reach me at seb.otero@berkeley.edu

I am a PhD candidate in Economics at Stanford University

I am an applied microeconomist and my research focuses on the study of firms and education policy, with special emphasis on Latin America. I have research projects in Brazil, the Dominican Republic, Chile, and Peru.

I will join Columbia University as an Assistant Professor of Economics in 2023 after spending one year as a postdoc at UC Berkeley. If you're interested in talking about my work, or yours, get in touch! You can reach me at sotero@stanford.edu



The effects of drinking and driving laws on car crashes, injuries, and deaths: Evidence from Chile

with Tomás Rau
Accident Analysis and Prevention, Vol. 106, pp. 262-274, Sept 2017

This paper analyzes the effects of lowering the legal blood alcohol content limit for drivers from 0.05 to 0.03 grams of alcohol per deciliter of blood (g/dL) and increasing license suspension periods for offenders. We take advantage of a rich data set of administrative records that allow us to identify direct measures of accidents involving alcohol including fatalities and injuries. Results show a significant decrease of 32% in alcohol-related car accidents right after the law was approved but the effects moderate over time (15% after three years). There is also a significant reduction in injuries (31% right after the approval and 11% after three years) but no statistically significant effects on deaths. Complementary analysis of blood samples shows that the law had an effect on blood alcohol content (BAC) of male drivers up to the 90th percentile of the BAC distribution.

Equilibrium Effects of Food Labeling Policies

with Nano Barahona and Cristóbal Otero
Accepted, Econometrica

We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. We show that consumers substitute from labeled to unlabeled products—a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the supply side, we find substantial reformulation of products and bunching at the thresholds. We develop and estimate an equilibrium model of demand for food and firms' pricing and nutritional choices. We find that food labels increase consumer welfare by 1.8% of total expenditure, and that these effects are enhanced by firms' responses. We then use the model to study alternative policy designs. Under optimal policy thresholds, food labels and sugar taxes generate similar gains in consumer welfare, but food labels benefit the poor relatively more.

Working papers

On the Design of Food Labeling Policies

with Nano Barahona, Cristóbal Otero, and Joshua Kim
April 2022

We study a regulation in Chile that mandates front-of-package warning labels on products whose sugar or calorie concentration exceeds certain thresholds. We document an overall decrease in sugar and calorie intake of 7-9%. To unpack the underlying mechanisms, we provide descriptive evidence of the impact of the policy on consumer choice both across and within categories and firms’ behavior. We find no noticeable substitution of products across food categories and show that most of the demand effect of the regulation comes from within category substitution. In addition, we find that a substantive portion of the overall effect comes from product reformulation. We discuss how these findings can inform the design of effective labeling policies.

The Equilibrium Effects of Public Provision in Education Markets: Evidence from a Public School Expansion Policy

with Michael Dinerstein, Daniel Morales, and Christopher Neilson
January 2022

In markets with private options, the optimal level of public provision may require balancing a tradeoff between reducing private options’ market power with the possibility of crowding out potentially high-quality products. We study the equilibrium effects of public education provision in the Dominican Republic, where the government aimed to increase the number of public school classrooms by 78% over a four-year period. We use an event study framework to estimate the effect of a new public school on local outcomes, where we instrument for how quickly the public school construction project finished with the characteristics of the contractor randomly assigned to build the project. We estimate that despite increasing local students’ hours of instruction, a new public school does not have an effect on local students’ test scores. But this null result hides considerable changes in students’ schooling options. We find that a new public school increased public sector enrollment significantly. As public enrollment increased, a large number of private schools closed while the surviving schools lowered prices and increased school quality. To study whether different levels of public provision may have had non-zero effects on student achievement, we specify and estimate an empirical model of demand (students choosing schools) and supply (schools choosing whether to enter, stay open, and what price to charge). We use the model estimates to calculate the level of public provision that maximizes learning. Due to equilibrium competitive effects, we find that the optimal level is non-monotonic in the quality of the increased public schooling..

The Equilibrium Effects of Subsidized Student Loans

with Nano Barahona and Cauê Dobbin
January 2022

We investigate the equilibrium effects of subsidized student loans on tuition costs, enrollment, and student welfare. Two opposing forces make the impact on tuition theoretically ambiguous. First, students with loans become less price-sensitive because they do not bear the total tuition cost, causing tuition to rise (direct effect). Second, loan programs tend to increase the market share of more price-sensitive students, reducing tuition (composition effect). We develop a model of the supply and demand for higher education and estimate it leveraging a large change in the availability of student loans in Brazil. We find that Brazil’s current loan program raises prices by 1.2% and enrollment by 11% relative to a counterfactual without loans. In contrast, we show that an alternative policy that gives loans only to low-income students raises prices by just 0.3% and enrollment by 16%. Most of the difference in enrollment between the two policies are due to price changes coming from a stronger composition effect in the alternative policy.

Affirmative Action in Centralized College Admission Systems

with Nano Barahona and Cauê Dobbin
November 2021, Claire and Ralph Landau Prize 2022 (best student SIEPR working paper)

This paper empirically studies the distributional consequences of affirmative action in the context of a centralized college admission system. We examine the effects of a large-scale program in Brazil that mandated all federal public institutions to reserve half their seats for public high school students, prioritizing those from socioeconomically and racially marginalized groups. After the policy was put in place, the representation of public high school students of color in the most selective federal degrees increased by 73%. We exploit degree admission cutoffs to estimate the effects of increasing affirmative action by one reserved seat on the quality of the degree attended four years later. Our estimates indicate that the gains for benefited students are 1.6 times the costs experienced by displaced students. To study the effects of larger changes in affirmative action, we estimate a joint model of school choice and potential outcomes. We identify the parameters of the model using exogenous variation in test scores—arising from random assignment to graders of varying strictness—that changes the availability of degrees for otherwise identical individuals. We find that the policy creates impacts on college attendance and persistence that imply overall income gains of 1.16% for the average targeted student, and losses of 0.93% for the average non-targeted student. Overall, the policy prompted a negligible increase in predicted income of 0.1% across all students in the population. Taken together, we find that the affirmative action policy had important distributional consequences, which resulted in almost one-to-one transfers from the non-targeted to the targeted group. These results indicate that introducing affirmative action can increase equity without affecting the overall efficiency of the education system.

Skin in the Game: College's Financial Incentives and Student Outcomes

with Nano BarahonaCauê Dobbin, Hanson Ho, and Constantine Yannelis
November 2021

This paper studies how schools respond to financial incentives. Governments can penalize institutions with high dropout or loan default rates, and these institutions can respond by increasing quality or changing the selection of students. We build an equilibrium model to illustrate the trade-off faced by policymakers. We study the predictions of the model using a 2017 reform in Brazil, which made schools pay a fee for students receiving federal student loans that dropped out or defaulted. Consistent with the predictions of the model, we find that schools more reliant on government aid reduced dropout rates, primarily by increasing quality.

Work in progress

Demand Shocks and Firm Dynamics: Evidence from Government Procurement Lotteries

with Marvin Cardoza, Michael Dinerstein, and Christopher Neilson

The Effects of Online Education on Market Structure and Student's Outcomes

with Nano Barahona, Cauê Dobbin, and Joaquín Fuenzalida

The Effects of Redistribution on Internal Migration: Evidence from Bolsa Familia

with Cauê Dobbin, and Juan Ríos