Research
My research interest lies in Industrial Organisation and Microeconomic Theory.
Industrial Organisation
I am interested in examining the effects of various food retail policies in the current inflationary environment and how market concentration changes the effect of such policies. I am intrested in the political economy aspect of such policies as well as how pricing conduct changes following interventions. I am using GfK panel data to examine the effect of food price controls introduced in Hungary in February 2022 and the effect of a progressive retail tax (in effect between 2010-2012 and reintroduced in 2020) on supermarket competition. My research approach encompasses both reduced form and structural analysis techniques.
Estimating the welfare effects of retail food price controls: the case of Hungary with Howard Smith (working paper)
Abstract Price controls have been proposed by many governments for many markets to improve consumer welfare. Their welfare impacts are theoretically ambiguous, depending on the market power of the firms supplying the products. This paper analyses the welfare effects of price controls introduced in Hungary from 2022 to 2023, which placed price caps and quantity floors on a subset of grocery products, with the aim of protecting consumer welfare. Using consumer-level data on grocery purchases from 2010 to 2023, we document that the price controls were associated with quantity increases for the capped products. To analyze the welfare impacts of the policy, we estimate a multi-category model of demand and supply model, in which consumers choose between stores and buy a bundle of products at their chosen store, and retailers set prices subject to the government's constraints. Using the consumer data and the model we estimate demand and back out marginal costs. The estimated model implies in counterfactual analysis that there is an increase in consumer surplus of up to 4.5\% of average consumer expenditure on the affected product categories.
Microeconomic Theory
I am interested in observational learning.
A Welfare Analysis of a Steady-State Model of Observational Learning with Margaret Meyer (working paper)
Abstract It is now well understood that when individuals learn not only from private sources of information but also by observing the choices of previous decision-makers, information may fail to be aggregated, and incorrect herds may result. Extrapolating from such findings, the conventional wisdom seems to be that, relative to equilibrium outcomes, efficiency would be improved if individuals relied more on their private information and less on the choices of predecessors. The canonical models of observational learning are, however, not particularly well suited to welfare analysis. In this paper, we develop a flexible, steady-state framework for characterizing equilibrium outcomes under a variety of observation structures, and we use it to examine the existence and form of welfare-improving interventions for a social planner. The steady-state approach transforms the planner’s problem from a dynamic one to an effectively static one. We allow the planner to intervene only by altering the decision rules used by individuals, not by directly altering the information structure. Our key results are as follows: We show that whether there exist welfare-improving adjustments for the planner and what form they take depends very much on the observation structure. In particular, we prove that there is no scope for the planner to improve welfare in a symmetric environment where each individual observes (with noise) the choice of only a single predecessor. For more general observation structures, we identify two distinct forces which can generate inefficiencies; we term these the "dispersion effect" and the "mean effect". We demonstrate that both forces can, for some observed data, make it optimal for individuals to place less rather than more weight on their private information.
Presentation of A Welfare Analysis of a Steady-State Model of Observational Learning by Margaret Meyer