Department of Economics
Ben Faber is assistant professor in the Economics Department at the University of California Berkeley. His research is at the intersection of international trade and economic development, broadly looking at how falling barriers to flows of trade, investment and ideas affect economic outcomes and policy choices in developing countries. Before joining UC Berkeley in 2013, he received his PhD from the London School of Economics after visiting MIT and UCLA as part of his doctoral studies.
Summary of recent papers:
Date: July 2017
Coauthors: Victor Couture (UC Berkeley), Yizhen Gu (Jinan University) and Lizhi liu (Stanford University)
Citation: Working paper
The number of people buying and selling products online in China has grown from practically zero in 2000 to more than 400 million by 2015. Most of this growth has occurred in cities. In this context, the Chinese government recently announced the expansion of e-commerce to the countryside as a policy priority with the objective to close the rural-urban economic divide. As part of this agenda, the government entered a partnership with a large Chinese e-commerce firm. The program invests in the necessary transport logistics to ship products to and sell products from tens of thousands of villages that were largely unconnected to e-commerce. The firm also installs an e-commerce terminal at a central village location, where a terminal manager assists households in buying and selling products through the firm’s e-commerce platform. This paper combines a new collection of survey and transaction microdata with a randomized control trial (RCT) across villages that we implement in collaboration with the e-commerce firm. We use this empirical setting to provide evidence on the potential of e-commerce integration to foster economic development in the countryside, the underlying channels and the distribution of the gains from e-commerce across households and villages.
Date: May 2016
Coauthors: David Atkin, Marco Gonzalez-Navarro
Citation: Journal of Political Economy, forthcoming
The arrival of global retail chains in developing countries is causing a radical transformation in the way that households source their consumption. This paper draws on a new collection of Mexican microdata to estimate the effect of foreign supermarket entry on household welfare. The richness of the microdata allows us to estimate a general expression for the gains from retail FDI, and to decompose these gains into several distinct channels. We find that foreign retail entry causes large and significant welfare gains for the average household that are mainly driven by a reduction in the cost of living. About one quarter of this price index effect is due to pro-competitive effects on the prices charged by domestic stores, with the remaining three quarters due to the direct consumer gains from shopping at the new foreign stores. In contrast, we find little evidence of significant changes in average municipality-level incomes or employment. We do, however, find evidence of store exit, adverse effects on domestic store profits and reductions in the incomes of traditional retail sector workers. We also show that the gains from retail FDI are on average positive for all income groups but regressive, and quantify the opposing forces that underlie this finding. Finally, we find that the estimated gains are specific to foreign entry, rather than being driven by the entry of modern store formats more generally.