Cristóbal Otero

Abstract. We study whether the quality of managers can affect public service provision in the context of public health. Using novel data from public hospitals in Chile, we show how the introduction of a competitive recruitment system and better pay for public hospital CEOs reduced hospital mortality by 8%. The effect is not explained by a change in patient composition. We find that the policy changed the pool of CEOs by displacing doctors with no management training in favor of CEOs who had studied management. Productivity improvements were driven by hospitals that recruited higher quality CEOs.

Working paper. CINCH WP 2025/02.

Media. El Mercurio, CNN Chile, Pivotes, Nada es Gratis 1, Esto No es Economía.

Policy. Nada es Gratis 2, Centro UC Políticas Públicas, video.

Abstract. We study the effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile. Public pharmacies sell the same drugs at a third of private pharmacy prices, because of stronger upstream bargaining and market power in the private sector, but are of lower quality. Public pharmacies induced market segmentation and price increases in the private sector, which benefited the switchers to the public option but harmed the stayers. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.5 percent.

Appendix. NBER Appendix.

Media. Pauta, The Clinic, Sonar FM, Las Ultimas Noticias, Chilevision Noticias 1, Chilevision Noticias 2, CNN Chile, LAPDE Podcast, Diario Financiero 1, Diario Financiero 2.

Policy. Centro de Competencia UAI, Nada es Gratis, Columbia Business School, Twitter thread.

Abstract. We study a regulation in Chile that mandates warning labels on products whose sugar or caloric concentration exceeds certain thresholds. We show that consumers substitute from labeled to unlabeled products--a pattern mostly driven by products that consumers mistakenly believe to be healthy. On the supply side, we find substantial reformulation of products and bunching at the thresholds. We develop and estimate an equilibrium model of demand for food and firms' pricing and nutritional choices. We find that food labels increase consumer welfare by 1.8% of total expenditure, and that these effects are enhanced by firms' responses. We then use the model to study alternative policy designs. Under optimal policy thresholds, food labels and sugar taxes generate similar gains in consumer welfare, but food labels benefit the poor relatively more.

Media. El Pais, Pauta, Radio Usach, Chilevision, America Economía, La Tercera, CNN Chile, BBC Sounds, DiarioConVos, Cadena 3, Canal de la Ciudad, DelSol, Infobae, Esto No es Economia, Pivotes, Centro Competencia, La Nacion.

Policy. Ciper Chile, Nada es Gratis, Centro UC Políticas Públicas, econimate, Twitter thread.

Abstract. This paper explores how discontinuities created by national borders can influence development across the Americas. We exploit the discontinuous nature of borders jointly with exogenous variation at the national level to identify discontinuous effects on proxies for economic development at the regional and pixel levels. We separate the effects of national institutions from local historical conditions. Our analysis yields three main findings. First, we find important discontinuities in development across national borders for the Americas. Second, we also show that they are, for the most part, caused by institutional differences at the national level and not for differences at the regional level in geography, climate, endowments, and pre-colonization conditions. Third, we also present evidence that differences in national institutions affect human capital at the regional level.

Abstract. We study the aggregate and heterogeneous effects of a front-of-package labeling policy implemented in Chile. We find that consumers reduced their sugar and caloric intake by 9% and 6%, respectively. On the demand side, labels prompt consumers to substitute within categories rather than switching between categories. Within-category responses are more pronounced when labels provide new information. On the supply side, we observe bunching at regulatory thresholds, with substantial heterogeneity across categories, consistent with differing costs of product reformulation. We conclude that considering policy-response heterogeneity is key for effective policy design.

Media. El Mercurio, Radio Cooperativa, Social Science Matrix.

Policy. Berkeley Econ, Centro Competencia CeCo.

Abstract. Occupational licensing is a widespread quality regulation that increases the quality of labor but reduces its quantity. We provide a framework to empirically quantify this trade-off and apply it to physician licensing, where both quality and access to care are critical concerns. Using quasi-exogenous variation driven mostly by a recent and unprecedented migration of physicians to Chile, we show that more physicians improve access and patient outcomes in tertiary care, including mortality. We also find that lower quality--as measured by physician performance on the licensing exam--worsens patient outcomes. Building on these findings, we evaluate the implications of locally changing the stringency of the current licensing policy.

Policy. Centro UC Políticas Públicas.