NBER

René Leal Vizcaíno

Bank of Mexico
Avenida 5 de Mayo 2
Colonia Centro
Código postal 06000
Alcaldía Cuauhtémoc
Ciudad de México
México

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Bank of Mexico

NBER Working Papers and Publications

June 2020Parallel Inverse Aggregate Demand Curves in Discrete Choice Models
with Kory Kroft, Matthew J. Notowidigdo, Ting Wang: w27437
This paper highlights a previously-unnoticed property of commonly-used discrete choice models, which is that they feature parallel demand curves. Specifically, we show that in random utility models, inverse aggregate demand curves shift in parallel with respect to variety if and only if the random utility shocks follow the Gumbel distribution. Using results from Extreme Value Theory, we provide conditions for other distributions to generate parallel demands asymptotically, as the number of varieties increase. We establish these results in the benchmark case of symmetric products, illustrate them using numerical simulations and show that they hold in extended versions of the model with correlated tastes and asymmetric products. Lastly, we provide a “proof of concept” of parallel demands as ...
Salience and Taxation with Imperfect Competition
with Kory Kroft, Jean-William P. Laliberté, Matthew J. Notowidigdo: w27409
This paper studies commodity taxation in a general model featuring imperfect competition and tax salience. We derive new formulas for the incidence and marginal excess burden of commodity taxation, and we estimate the necessary inputs to the formulas by combining Nielsen Retail Scanner data from grocery stores in the US with detailed sales tax data. We calibrate our new formulas and conclude that the incidence of sales taxes on consumers is increasing in tax salience, and the marginal excess burden of taxation is larger than standard formulas that ignore imperfect competition and tax salience.

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