Distributional Effects of Competition: A Simulation Approach

Abstract

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More competition to alleviate poverty? A general equilibrium model and an empirical study

“…Rodriguez-Castelan and Rodriguez-Chamussy (2018) prove that market concentration in the retail sector in Mexico raises the poverty headcount ratio at the municipality level. In a more recent work, Rodriguez-Castelan et al (2021), carrying a simulation and using data from the Mexican Household Income and Expenditure survey, prove that combining increased competition in mobile telecommunication and corn products markets reduces poverty and inequality. The actual effects are likely bigger than estimated as their work is restricted to the effect through the price channel.…”