2026 Theses Doctoral

Essays on Information and Climate Economics

Pommer Muñoz, Ricardo A.

This dissertation consists of three chapters in information and climate economics. The first two chapters study the promise and perils of climate-adaptation policies in developing economies. Chapter 1 asks why markets for beneficial adaptation technologies fail to form, pointing to cognitive frictions on the demand side. Chapter 2 shows how common-pool externalities can turn well-intentioned adaptation subsidies into policies that exacerbate the underlying resource problem. Chapter 3 turns to information frictions in public service delivery, asking whether physical proximity to a government service network raises take-up and targeting efficiency of means-tested transfers.

In Chapter 1, I argue that consumers’ difficulty in evaluating product quality is a barrier to the formation of climate adaptation markets and study this in the market for rainfall index insurance. In an RCT with 525 Colombian smallholder coffee farmers, I elicit demand for contracts that vary in quality while holding price constant, and find low baseline elasticities consistent with significant cognitive frictions. A climate-literacy treatment raises this elasticity by 51%, whereas an advertising treatment has no effect on elasticity and decreases average demand by 11%, consistent with low insurer reputation. A simple model rationalizes both results: cognitive frictions increase firm incentives to supply low-quality contracts, lowering insurer reputation and “poisoning” the market.

In Chapter 2, co-authored with Nikhil Basavappa, we consider how common-pool externalities shape the welfare consequences of climate-adaptation policies. We develop a parsimonious model showing that subsidizing efficient irrigation can paradoxically exacerbate groundwater depletion where extraction externalities are severe, and test its predictions using geophysical variation and a $1.35 billion Indian micro-irrigation program. Consistent with the model, extraction falls 9.2% in low-externality areas but rises 11.0% in high-externality areas. The program also induces climate-adaptive adjustments to rainfall in low-externality areas and maladaptive ones in high-externality areas. The same common-pool conditions that typically justify intervention, our findings illustrate, may also determine its welfare impact.

In Chapter 3, co-authored with Daniela Paz Cruzat, we study information frictions in access to government transfers using the case of ChileAtiende, Chile’s one-stop-shop service network. Exploiting the opening of a new office in a low-income Santiago suburb as a quasi-experiment, we show that halving the distance to the office raises in-person information demand by 21% and housing-subsidy take-up by 18%, with information effects concentrated among adults aged 65 and above. Our data shows reducing distance does not appreciably shift subsidies toward poorer areas, and our confidence intervals rule out economically meaningful targeting losses. Physical access thus shapes who receives transfers, but is not operating as an effective screening device.