Diego Jiménez Hernández
Job Market Candidate

Stanford University
Department of Economics
579 Jane Stanford Way
Stanford, CA 94305

(650) 557-8893

Curriculum Vitae

Industrial Organization, Development Economics

Expected Graduation Date:
June, 2021

Dissertation Committee:

Liran Einav (co-primary)

Pascaline Dupas (co-primary)

Melanie Morten

Job Market Paper

Should The Government Sell You Goods? Evidence from the Milk Market in Mexico
Joint with Enrique Seira

We study a nationwide welfare program in Mexico in which the government, in an effort to eliminate hunger, sells milk to households at subsidized rates via a network of thousands of specialized "ration stores." Such direct provision programs, which exist in many countries, often appear puzzling to economists, as it seems unlikely that the government would have any comparative advantage relative to the private market in procuring and distributing milk. To understand direct provision, we formulate and estimate an equilibrium model of the milk market, and use it to compare this program with natural (budget-neutral) alternatives such as milk vouchers or unrestricted cash transfers. Using rich household-level panel data and the variation generated by the staggered entry of new government stores, we show that market power by private milk suppliers is an important concern, and that government-sold and privately-sold milk are close (though imperfect) substitutes. Consequently, direct provision plays an important role in the milk market in Mexico by disciplining private-milk prices. Indeed, our results suggest that, in the absence of government milk, private market prices would be 3% higher, and that direct provision generates consumer welfare gains of 4% relative to milk vouchers and 2% relative to unrestricted cash transfers.

Published Papers

Should We Treat Data as Labor? Moving Beyond "Free"
Joint with Imanol Arrieta Ibarra, Len Goff, Jaron Lanier, and E. Glen Weyl

AEA Papers and Proceedings, 2018, 108: 38-42.
Coverage: The Economist, Fast Company, Financial Times, El Pais Retina, TechTank - Brookings, New York Times.

In the digital economy, user data is typically treated as capital created by corporations observing willing individuals. This neglects users' role in creating data, reducing incentives for users, distributing the gains from the data economy unequally and stoking fears of automation. Instead treating data (at least partially) as labor could help resolve these issues and restore a functioning market for user contributions, but may run against the near-term interests of dominant data monopsonists who have benefited from data being treated as "free". Countervailing power, in the form of competition, a data labor movement and/or thoughtful regulation could help restore balance.

Working Papers

Expanding Financial Access Via Credit Cards: Evidence from Mexico
Joint with Sara G. Castellanos, Aprajit Mahajan and Enrique Seira

Reject & Resubmit, The Review of Economic Studies
Coverage: J-Pal Summary.

Credit card debt is increasingly common among poor and inexperienced borrowers — thus de facto a financial inclusion product. However, it remains relatively under-studied. We use detailed card level data and a product that accounted for 15% of all first-time formal loans in Mexico and show that default rates are high and ex-ante unpredictable for new borrowers — suggesting an important role for ex-post contract terms in limiting risk. However, using a large nation-wide experiment we find that default is unresponsive to minimum payment increases, a commonly proposed policy remedy. We provide evidence that the zero result is driven by the offsetting effects of tightened liquidity constraints and lower debt burdens. Surprisingly, we also find muted default responses to large experimental changes in interest rates — suggesting a limited role for ex-post moral hazard in our context. Finally, we use job displacements to document large effects of unemployment on default, highlighting the centrality of idiosyncratic shocks as a barrier to the expansion of formal credit among poorer populations.

Work in Progress

An Empirical Study of the Value of Data: Evidence from Uber
Joint with Imanol Arrieta Ibarra, Tiago Caruso, and E. Glen Weyl

There has been a recent call for companies to acknowledge and pay for the data their algorithms use to make profits. In order to achieve this, there needs to be a way to price data. Current efforts have tried to ascribe the value of data to hidden costs such as the loss of privacy. We present a novel approach to estimating an upper bound for the economic value of data in algorithms. Our method does not assume that users have failed to internalize any costs in data production (such as privacy). Here we show that the price of data is in great part determined by the power dynamics present in markets. We apply our method to ride-sharing, simulating a market using data from a large ride-sharing platform (Uber). We estimate that in our scenario, with users having full market power, data would contribute up to 47% of Uber's revenue. This would translate to average payments to drivers of approximately $30 per day, solely as compensation for the value of the data they generate as drivers, which corresponds to 20 to 40 percent of a average driver's daily earnings.

Currency Depreciations and Savings Behavior: Evidence from Household Deposits in Armenia
Joint with Aleksandr Shirkhanyan, and Joshua Kim

A unique problem that households in the developing world often face is how to safely store their assets when the value of the local currency is unstable. In this paper, we study how households make such savings decisions following a large currency depreciation in Armenia. We exploit the unique structure of Armenian financial instruments, which generates quasi-random variation in which savers are nudged into paying attention to the depreciation. Using a differences-in-differences design, we find that individuals who received a nudge to pay attention to the currency depreciation significantly reduced their total savings, held their savings for shorter periods of time, and chose to save their assets in USD. These random nudges that induce differential initial attention affects the future savings choices that individuals make. While some of the differences in savings decisions could be, in principle, temporary, we show that they persist long after the original depreciation event.

And Some, I Assume, Are Good People: Drivers of Mexican Migration to the US
Joint with Eduardo Laguna