Gretchen Sileo


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Works in Progress

Proactive and Reactive Infrastructure Investment

Maintaining infrastructure requires investment. Faced with uncertain quality degradation, managers can either invest proactively to prevent failure or reactively to address problems. Using a new dataset on drinking water systems, I construct and estimate a dynamic discrete choice model of infrastructure investment. Simulation results indicate that investment is currently too low to prevent system quality decline. Proactive-promoting policies facilitate the prevention of most health-based violations but leave some systems vulnerable to extreme quality decline. By contrast, reactive-promoting policies lead to milder but pervasive violations. A policy that increases proactive investment and reserves a safety net of reactive support enables all managers to sustain functional infrastructure.

Technology and Market Power: The United States Cement Industry, 1974-2019 (with Nathan Miller, Matthew Osborne, and Gloria Sheu)
Reject and Resubmit, American Economic Review, 2023.

We examine the evolution of market power in the cement industry over more than four decades using a structural model of procurement. The model matches aggregated outcomes in the data, and implies transportation costs, shipping distances, and demand elasticities that are consistent with external sources. Evaluating county-level outcomes throughout the contiguous United States, we find that market concentration and markups increase but that prices do not rise. We attribute these patterns to a technological innovation—the precalciner kiln—that lowered variable costs, increased plant-level capacities and economies of scale, and contributed to an industry shakeout in which many plants closed.

The Price That Inmates Pay (with Nathan Miller and Marleen Marra)

Incarcerated individuals in the United States purchase goods and services from monopoly vendors selected by their correctional authority. We study the price that inmates pay for phone calls, which the Federal Communications Commission has characterized as “exorbitant.” We specify an auction model of procurement and estimate it using data from public records requests. Our results indicate that market power contributes to high prices but that more important are kickbacks (or “commissions”) that providers give to the correctional authority. Regulation that substantially lowers price and eliminates commissions can more than double inmate surplus and simultaneously enable providers to recover their costs.

Low-Carbon Investment and Climate Policy (with Sarah Armitage, Nathan Miller, and Matthew Osborne)