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Applied Microeconomics | Industrial Organization: Private Monopoly and Restricted Entry – Evidence from the Notary Profession (by Frank Verboven and Biliana Yontcheva)

Frank Verboven, KU Leuven
Friday, March 12, 2021
10:00-11:00 AM
Virtual
ABSTRACT:

This paper studies entry and price restrictions in a private monopoly: the Latin notary system. Under this widespread system, the State appoints notaries and grants them exclusive rights to certify important economic transactions, including real estate, business registrations, and marriage and inheritance contracts. We develop an empirical framework to uncover the current policy goals behind the entry and price restrictions. We estimate a spatial demand model to infer the extent of market expansion versus business stealing from entry; a multi-output production model to infer the size of scale economies and markups; and an entry model to infer the State’s objective function (conditional on the regulated prices). We subsequently perform policy counterfactuals with welfare-maximizing and free entry. We show how policy reform would generate considerable efficiency increases, and decrease the cost of the services to consumers.

* To join the seminar, please contact at econ.events@umich.edu
Building: Off Campus Location
Location: Virtual
Event Type: Workshop / Seminar
Tags: Economics, seminar
Source: Happening @ Michigan from Department of Economics, Applied Microeconomics/Industrial Organization