Working Papers

  • Are Cities Preferred to Villages? Estimating Location Preference in A Developing Country  

    Abstract: Rapid urbanization in developing countries has been attributed to higher expected income in cities and little importance has been given to the role city amenities play. Economists have measured quality of life (QOL) indices of cities in developed country context only. In this paper, I compute QOL measures of urban and rural locations in Senegal. Unlike in previous studies where estimates of location preferences are based on variations in real wages across locations, I estimate preferences directly from observed choices by developing a new empirical methodology based on discrete choice and spatial equilibrium models. I exploit unique location choice data of public school teachers whose nominal wages are fixed across locations. I obtain revealed preference rankings over locations. These rankings indicate teachers prefer cities despite its low real wages. I then build on standard methodology from previous literature to construct adjusted QOL measures: I find that cities have higher QOL than rural areas for all workers. These results have important implications for place-based policies, and for policies to bring high-quality public sector workers to rural areas. 

  • Firm Response to VAT Policy: Evidence From Ethiopia (with Mesay M. Gebresilasse). SUBMITTED

    Abstract: The empirical evidence on the effects of VAT policy in developing countries is scarce. Using a detailed firm level census panel, we study the response of manufacturing firms to the adoption of VAT in Ethiopia. The VAT policy mandated firms with revenue higher than $22000 to register for VAT and the smaller firms to pay a lower turnover tax. First we provide suggestive evidence of firm bunching around the threshold. Second, applying a difference-in-differences strategy with big firms (revenue > $22000) as treated and small firms as controls, and excluding potential bunching firms, we find that big firms experience increases in reported revenue, value added, revenue share of taxes paid, revenue share of raw materials, and firm productivity; formality increases relatively more for small firms. VAT increases both revenue efficiency and production efficiency for big firms. These results are driven by whether firms are in concentrated or competitive industries. 

Work in Progress

The Impact of Policy of Near-Universal Enrolment in Middle School: A Regression Discontinuity Approach

Evasion Responses and Design of Production Inefficient Income Taxes in a Developing Country (with Bassirou Sarr)

Firm Response to Change in Withholding VAT Policy: Evidence from Senegal (with Bassirou Sarr)

Measuring Efficiency of Tax Centers in Senegal: A Disaggregated Approach (with Bassirou Sarr)

RCT: Compliance in Self-Reported Income (Real estate and SME Ownership Income): Nudges to Taxpayers and New Enforcement Mechanisms (with Bassirou Sarr)

“Inefficiency in Award Procedures of Public Projects in Senegal: Evidence from Disaggregated Procurement Data” (with Francis Annan)

Soule Sow
Ph.D. Candidate
Department of Economics
1022 International Affairs Building
420 West 118th Street
New York City, NY 10027

Phone: (207) 513-9051