Recent Papers

Job Market Paper:
Does Local Politics Drive Tropical Land-Use Change? Property-Level Evidence from the Amazon
(with Fanny Moffette) (R&R at The Economic Journal)
Working Paper   Slides

Click for AbstractLand conversion to agriculture is a defining environmental challenge for tropical regions. We construct a novel panel dataset of land-use changes on the properties of municipal politicians and campaign donors in the Brazilian Amazon to assess channels through which local politics may drive land conversion. Estimating event studies around close mayoral elections, we find that large landholders significantly increase soy cultivation while the candidate they donated to is in office. This suggests landholders invest in political influence to overcome barriers to agricultural intensification. In turn, mayors who receive landholder donations govern in favor of agriculture – increasing spending on agricultural promotion and distribution of rural credit. While agricultural promotion "returns the favor" for mayors’ donors, it is not precisely targeted. We document large spillovers onto non-donor properties, resulting in increased deforestation and environmental violations. Results reveal how patronage and special interests drive land-use change and deforestation in the Amazon.

Winning and Losing the Resource Lottery: Governance after Uncertain Oil Discoveries
(Published in the Journal of Development Economics)
Published Version   Slides   Replication Package
Media Coverage:   VoxDev   World Bank Development Impact Blog   Grist

Click for Abstract Natural resource discoveries are often followed by delays and uncertain production outcomes, creating challenges for governments that anticipate resource revenues. I leverage exogenous subnational variation in offshore oil discoveries in Brazil to identify dynamic effects of discovery news and revenue shocks on local public finances, public goods provision, and politics. Municipalities where discoveries are realized enjoy significant growth in revenues and spending, but fail to improve public goods provision or stimulate economic activity. Municipalities that experience discovery announcements but never receive windfalls suffer long-term declines in revenues, investment, and public goods provision relative to never-treated controls. I show that electoral responses underlie these dynamics: discovery announcements draw less-educated candidates into local politics, and shortfalls between anticipated and realized oil revenues increase political turnover. Findings highlight discovery uncertainty as a fundamental resource governance challenge, and reveal mismanagement of windfalls and adjustment costs after disappointment as two faces of the Resource Curse.

Timing is Everything: Labor Market Winners and Losers during Boom-Bust Cycles
(with Dominic Parker and Steven Poelhekke) (Under Review)
Working Paper   CEPR Discussion Paper   Slides (English)   Slides (Portuguese)   Ipea Webinar (Portuguese)

Click for Abstract Sectoral expansions and contractions require labor reallocation between declining and booming sectors. Which types of workers gain and lose during these transitions? Using linked employer-employee panel data from Brazil spanning a full boom-bust cycle in its oil sector, we find that timing of labor market entry is critical. Only highly educated workers hired at the onset of a boom reap significant earnings and employment benefits. Low-education workers and later entrants experience earnings and employment penalties, reflecting a last-in, first-out pattern. Skilled professional occupations insulate high-education early entrants during downturns, while a boom in sector-specific education erodes earnings of later entrants.

Quantifying the Effects of Energy Infrastructure on Bird Populations and Biodiversity
(Published in Environmental Science and Technology)
Published Version   Open Access Pre-Print   Replication Package
Media Coverage:   The Economist   Los Angeles Times   Die Presse (Austria)   Courrier International (France)   Focus Online (Germany)   BNNVARA (Netherlands)   El Imparcial (Mexico)   El Nacional (Spain)   ETC (Sweden)   Le Temps (Switzerland)   Tages Anzeiger (Switzerland)   Basler Zeitung (Switzerland)   Berner Zeitung (Switzerland)   Der Bund (Switzerland)   Enrique Dans (Medium Blog)   Big Pivots (USA)

Click for Abstract Shale oil and gas production and wind energy generation both expanded rapidly across the United States between 2000-2020, raising concerns over impacts on wildlife. I combine longitudinal micro-data from the National Audubon Society’s Christmas Bird Count with geolocated registries of all wind turbines and shale wells constructed in the contiguous US during this period to estimate the causal effects of these contrasting types of energy infrastructure on bird populations and biodiversity – key bellwethers of ecosystem health. Results show that the onset of shale oil and gas production reduces subsequent bird population counts by 15%, even after adjusting for location and year fixed effects, weather, counting effort, and anthropic land-use changes. Wind turbines do not have any measurable impact on bird counts. Negative effects of shale are larger when wells are drilled within important bird habitats.

Work in Progress

Oil Production under Subsidies: Evidence from the US Royalty Relief Program
(with Julien Daubanes, Diego Cardoso, and Pritam Saha)

Click for Abstract Supply-side climate policies are receiving increasing attention from governments. For instance, the US is currently considering a major overhaul of rules governing oil extraction on federal lands – which have remained unchanged for nearly a century. We exploit lease-level variation introduced by a temporary royalty relief policy in 2020 to estimate the effects of changes in oil extraction taxes on drilling activity, oil and gas production, and royalty revenues. We assemble a month-lease panel covering drilling and production on all federal oil and gas leases in the contiguous United States between 2005-2022 that accounts for allocation agreements across leases. Using a difference-in-differences strategy that compares outcomes on leases approved for royalty relief with similar untreated leases, we find that royalty reductions lead to immediate increases in the number of producing wells (extensive margin), but also in production from already active wells (intensive margin). Evidence of an intensive-margin response differs from previous studies focused on conventional oil production, suggesting unconventional leases may be more reactive in the short run. Our estimates allow us to quantify the effects of proposed US oil extraction tax reforms on oil and gas production, public revenues, and carbon emissions.

Can Natural Resources Promote Industrialization? Firm-Level Effects of a Local Content Policy in Brazil
(with Fabio Maciel) Funded by STEG Small Research Grant

Click for Abstract Industrial policies are hotly debated, but empirical evidence of their efficacy and underlying mechanisms is thin. I evaluate a common industrial policy–a local content requirement (LCR)–which requires multinational firms to source a percentage of their inputs from local suppliers. Using firm-level panel data from Brazil, I measure whether an LCR for the oil sector increased manufacturing firm growth, innovation, and productivity among upstream input-suppliers, or instead led to rent-seeking and inefficiencies. Competition is a primary mechanism underlying successful industrial policies. I measure whether targeted firms in more competitive subsectors exhibit higher productivity growth relative to firms in less competitive subsectors after introduction of the policy. Another justification of industrial policies is their potential to create positive spillovers. By measuring supply-chain linkages and distance between targeted and non-targeted firms, I estimate spillover effects of the LCR on the broader manufacturing sector. Finally, I leverage data on campaign donations made by LCR beneficiary firms and firm owners to explore the role of special interest politics in sustaining the LCR.

Pipelines and Crime: Unintended Consequences of Mexico’s Crackdown on Fuel Theft
(with Itzel de Haro Lopez)

Click for Abstract Organized criminal groups in Mexico generate significant revenues through thefts of refined oil and gas products from pipelines. This paper measures the direct and spillover effects of the Mexican government's campaign to crack down on fuel thefts in 2019. We combine geospatial data on the presence of fuel and liquid petroleum gas (LPG) infrastructure with longitudinal data on crime and cartel presence to estimate the effects of increased enforcement on local levels of crime and violence. We find that a government crackdown on thefts from fuel pipelines led to a substitution in cartel activity and violence toward less-policed LPG pipelines, as well as spillovers of violence into municipalities bordering fuel pipeline locations. Furthermore, while the crackdown achieved its immediate aim of reducing fuel pipeline thefts, it failed to reduce cartel presence in pipeline municipalities.

Human Capital and Local Spillovers Across the Mining Lifecycle
(with Steven Poelhekke and Fabio Maciel)

How Do Multinational Firms Adapt to Sanctions? Field-Level Evidence from the Oil Industry

Local Content Policies and Reorganization in the Global Mining Industry
(with Jonah Rexer)

Sustainability and Quality-Upgrading in Cacao Supply Chains: Experimental Evidence from Ghana
(with Salvatore di Falco and Utsoree Das) Funded by Horizons Europe “Transformative Pathways” Project

Other Peer-Reviewed Publications

The Relation Between Labor Productivity and Wages in Brazil: A Sectoral Analysis
Erik S. Katovich and Alexandre Gori Maia
Nova Economia, Vol. 28, No. 1, pp. 7-38 (2018)
PDF   Published Version

Click for Abstract Labor productivity is a crucial long-run determinant of real wages. Nonetheless, wage and productivity dynamics often diverge in practice due to a range of economic and institutional factors. This study analyzes the relation between the dynamics of labor productivity and wages in Brazil from 1996 to 2014, and adopts a sectoral perspective to account for divergent trends among economic sectors. Analyses are based on pooled data drawn from the National Accounts and the Pesquisa Nacional por Amostra de Domicílios, and hierarchical data models are estimated to assess the impacts of state- and sector-level factors on individuals’ wages. Results indicate that productivity is significantly positively associated with wage levels for all economic sectors, but that institutional factors such as labor formalization and minimum wage exert equally significant impacts, suggesting that wage growth over the 1996-2014 period was as much the result of institutional changes as of transformation of Brazil’s productive structure.

Are GMO Policies “Trade Related”? Empirical Analysis of Latin America
Pamela J. Smith and Erik S. Katovich
Applied Economic Perspectives and Policy, Vol. 39, No. 2, pp. 286-312 (2017)
Published Version

Click for Abstract This paper empirically examines whether GMO policies are “trade related” for countries in Latin America (LA). First, we use the Balassa index to assess the “revealed comparative advantage” of LA countries. We find that LA countries have a revealed comparative advantage in GMO industries relative to the world, and that intra-regional trade in these industries is modest relative to external trade. Second, we estimate the Gravity model to examine the effects of importers’ GMO policies on Argentina and Brazil’s bilateral exports of soybeans and maize. We find that strong GMO policies in importers have a negative effect on Argentina’s bilateral exports of soybeans (an industry and country with historically high GMO content). Further, we find that past GMO policies are a strong determinant of Argentina’s future bilateral exports, and that the negative trade effects of strong GMO policies are increasing over time. In contrast, we find a weaker relationship between the GMO policies of importers and Brazil’s bilateral exports (consistent with Brazil’s more recent increases in GMO content). These findings for Argentina and Brazil provide a benchmark for other developing countries that are looking for guidance on servicing trading partners with diverse GMO policies.