Luca Repetto

Assistant Professor of Economics, Uppsala University

I am an assistant professor at the department of Economics, Uppsala University and a research affiliate at CESifo. I received my PhD from CEMFI, Madrid in 2015.

My research covers topics in applied economics such as political economy, housing economics, and econometrics.

I am currently visiting CEMFI until the end of March 2019.

Political budget cycles with informed voters: evidence from Italy, October 2017
Accepted at The Economic Journal

- show abstract - link to the published version - data and replication files

I exploit a reform that required Italian municipalities to disclose their balance sheets before elections to study whether having more informed voters affects the political budget cycle. Municipal investment in the year before elections is 28.5% higher than in electoral years, and the reform reduced this pre-electoral spending increase by one-third. I then study the role of local newspapers in disseminating municipal financial information to voters and find that the effect of the reform is twice as large in areas with relatively many newspaper readers, suggesting that mayors react to more informed voters by reducing spending manipulation.

Sending the pork home: birth town bias in transfers to Italian municipalities (with F. Carozzi) Journal of Public Economics (134), February 2016, Pages 42-52

- show abstract - link to the published version - data and replication files

We ask whether the birthplaces of Italian members of Parliament are favoured in the allocation of central government transfers. Using a panel of municipalities for the years between 1994 and 2006, we find that municipal governments of legislators' birth towns receive larger transfers per capita. Exploiting variation in birthplaces induced by parliamentary turnover for estimation, we find that this effect is driven by legislators who were born in a town outside their district of election. As a result, we argue that our findings cannot be a consequence of re-election incentives, the usual motivation for pork-barrel policies in the literature. Rather, politicians may be pursuing other personal motives. In line with this hypothesis, we find that the birth town bias essentially disappears when legislative elections are near. We explore several possible mechanisms behind our results by matching parliamentarians to a detailed dataset on local level administrators.

The Price of Inattention: Evidence from the Swedish Housing Market, May 2018, with A. Solis

- show abstract

Do behavioral biases affect prices in a high-stakes market? We study the role of left-digit bias in the purchase of an apartment. Left-digit bias is the inability to fully process digits after the first, perceiving prices just below a round number (such as $3.99) as cheaper than their round counterpart ($4). Apartments listed at just-below asking prices are sold at a 3-5% higher final price after an auction. This effect appears not to be driven by differences in observables or in real estate agents' behavior. Auctions for apartments listed just-below are more competitive and attract more bidders and bids.

Distributive Politics inside the City? The Political Economy of Spain's Plan E, September 2017, with F. Carozzi

- show abstract - SERC working paper version (Feb. 2017) and blog entry - Nadaegratis entry (in Spanish)

We study distributive politics inside cities by analysing how local governments allocate investment projects to voters across neighbourhoods. In particular, we ask whether politicians use investment to target their own supporters. To this aim, we use detailed geo-located investment data from Plan E, a large fiscal stimulus program carried out in Spain in 2009-2011. Our empirical strategy is based on a close-elections regression-discontinuity design. In contrast to previous studies - which use aggregate data at the district or municipal level - we exploit spatial variation in both investment and voter support within municipalities and find no evidence of supporter targeting. Complementary results indicate that voters may be responding to investment by increasing turnout. Overall, our findings suggest that distributive politics only play a minor role inside the city

Testing a large number of hypotheses in approximate factor models, December 2014, with D. Amengual 

- show abstract

We propose a method to test hypotheses in approximate factor models when the number of restrictions under the null hypothesis grows with the sample size. We use a simple test statistic, based on the sums of squared residuals of the restricted and the unrestricted versions of the model, and derive its asymptotic distribution under different assumptions on the covariance structure of the error term. We show how to correct the expressions for the limiting mean and variance in the presence of both serial and cross-section correlation and provide estimators for those quantities that are easy to implement. Finally, we illustrate the small sample performance of these testing procedures through Monte Carlo simulations and apply them to reconsider Reis and Watson (2010)'s hypothesis of existence of a pure inflation factor in the US economy.

- Sex ratios and the city: long-run effects of local marriage prospects on individuals, spouses and children (with M. Karadja and A. Solis)

- Legislative Fragmentation and Government Stability: Empirical Evidence from Spain (with F. Carozzi and D. Cipullo)

Econometric Theory (Master in Economics): 2016, 2017

Econometrics II (PhD) : 2016, 2017