Research projects

This project is divided in four research lines with similar and related goals. In the first one, I studied the incentives to invest in the energy/natural resources sector in the presence of uncertainty. This line produced one research article, in which I show that developing countries with abundant natural and energy resources do not have an incentive to improve their judicial quality. In the second research line I studied the same topic (that is, I also study investment incentives) but I focused in particular on the electricity sector. This line of research produced two scientific articles. In the first one I show that regulating investment in generation capacity leads to an optimal solution in the presence of price caps in the wholesale electricity market. In the second one I show that the so-called Operating Reserves Demand Curves (ORDCs) improve the reliability of the power system, specifically in the presence of high penetration of intermittent (renewable) generation resources. The third research line focused on the incentives to invest in distributed generation (i.e., solar panels). This line led me to set up and solve analytically a theoretical model of two-sided markets in which agents can either buy, sell, or do both at once. Likewise, this line produced two research articles. In the first one I show that different platform pricing options (that is, a fixed fee, a variable fee, or a combination of both) do not affect the market outcome. In the second article I solve a general model of two-sided markets, for which I characterize optimal platform pricing and document the consequences of platform mergers.

In the fourth line of research, I studied the consequences of investment (or lack of thereof) in electricity generation in developing countries. Once again, this research line produced two scientific articles. In the first one I empirically show using survey data from Kenya that a poor maintenance of the generation and distribution of electricity leads to outages, which also discourage households from purchasing an electricity connection for their homes. In the second one I use (survey) panel data from Tanzania to document that the installation of electricity mini-grids increases the use of energy among households that are nearby and, consequently, it also increases household welfare.