Working Papers
Identifying Buyer's Conduct in Procurement Auctions
Public procurement tenders often attract few bidders even when no formal policies restrict competition. We study how contracting authorities shape participation through tender design using data on repeated purchases of urban buses. We document that buyers restrict participation through numerous eligibility requirements and scoring criteria embedded in specifications. We then develop an empirical strategy to identify the motives behind this behavior. The results are consistent with efforts to avoid switching costs within fleets and are difficult to reconcile with corruption-based explanations. Moreover, we show that these criteria primarily serve to favor specific bidders rather than reflect stable preferences over technological features.
Links: (pdf available upon request)
The Costs of Fleet Variety
joint with Dan Yu
We study how heterogeneity in capital inputs affects firm performance. Drawing on detailed data on municipal bus fleets in Poland, we exploit plausibly exogenous variation generated by public procurement and nationally coordinated sales behavior of bus manufacturers to identify the causal effects of variety in fleet composition across brands and other technical dimensions. More heterogeneous fleets exhibit lower vehicle utilization and, for a fixed level of output, require more units of capital and generate higher costs. Our results emphasize that the productive capacity of capital depends on its internal structure, not only on its aggregate quantity or value.
Links: (pdf)
Costs of Variety and Public Procurement: The Case of Municipal Buses
I study a public procurement environment in which buyers repeatedly purchase differentiated equipment and where subsequent operation or maintenance costs are lower when acquiring incumbent equipment types, giving rise to conflicting incentives: facilitating competition among potential sellers leads to lower prices while restricting competition among them allows buyers to avoid costs of introducing a new variety. I construct novel data on fleet renewal by municipal bus operators in Poland who use a prevalent scoring auction format to favor incumbent bus producers. I develop and estimate a structural model of auctions with bidder favoritism to quantify the main driving forces of the trade-off. The results indicate that favoritism helps buyers manage the trade-off by reallocating the winning probability toward preferred sellers while keeping the competitive pressure on prices if enough bidders appear at the auction. Increasing order size may increase welfare by stimulating participation and weakening the relative significance of variety.
Recipient of Young Economists’ Essay Award at EARIE 2024, and runner-up in 9th UniCredit Econ JM Best Paper Award.
Previously circulated under the title Procurement with Bid Preference and Buyer’s Switching Costs: The Case of Municipal Buses.
The Effect of Constitutional Provisions on Education Policy and Outcomes
joint with Anusha Nath and Scott Dallman
Education services in the United States are determined predominantly by non-market institutions, the rules of which are defined by state constitutions. This paper empirically examines the effect of changes in constitutional provisions on education outcomes in the United States. To show causal effects, we exploit discontinuities in the procedure for adopting constitutional amendments to compare outcomes when an amendment passed with those when an amendment failed. Our results show that adoption of an amendment results in higher per-pupil expenditure, higher teacher salaries, smaller class size, and improvements in reading and math test scores. We examine the underlying mechanism driving these results by studying the actions of the legislature and the courts after an amendment is passed. We find that, on average, the legislature responds with a one-year lag in enacting education policies satisfying the minimum standards imposed by the amendment, and there is no increase in the number of education cases reaching appellate courts. Using school finance reforms, we also show that in situations where the legislature fails to enact education policies, courts intervene to enforce constitutional standards to improve outcomes. This enforcement mechanism is more impactful in states that have higher constitutional minimum standards. Taken together, the causal effects on education outcomes and the patterns in legislative bill enactments and court cases provide a novel test of the hypothesis that a strong constitutional provision improves the bargaining position of citizens vis-à-vis that of elected leaders. If citizens do not receive education services as mandated in the constitution, they can seek remedy in court.
Links: (pdf) (short slides)
Other work
- The impact of inflation expectations on Polish consumers’ spending and saving (with Ewa Stanisławska, Eastern European Economics, 55.1 (2017): 3-28)