Could I get a cigarrete for MXN 3. 5? How gender and smoking affect cigarette street market negotiation and price discrimination in Mexico City


Does buyer’s sex (smoking condition) affect the cigarettes’ prices that Mexico City street vendors are willing to charge? We conducted a naturally occurring field experiment to answer this question. By design, each observation of this experiment consisted in a negotiation for a given number of cigarettes and all observations were conducted following the same protocol. Experimental treatments vary the number of cigarettes and total price set as goal for that negotiation. Additionally, in each negotiation sellers faced a different buyer with potentially different sex and smoker or not smoker condition, then previous ones. Thus, the systematic collection of negotiations and variation of treatments and buyers’ characteristics among our experimental data set allow us not only to identify if discrimination exist across buyers of different sex and smoking conditions.

For this preliminary analysis, we focused on two characteristics: sex and smoking condition. We analyze the effects of these characteristics on final rates of agreement and prices achieved by male and female enumerators, a characteristic easily observable for the seller as well as smokers and non- smokers an a priori unobservable characteristic. Identifying these effects are of relevance given that potential price discrimination could have different effects on the consumption and health of smokers of different characteristics.

To the best of our knowledge, this is the first field experiment studying price discrimination in where several subjects negotiated in an informal (illicit) market with sellers. Furthermore, this unique dataset is not only novel because of the already captured this usually non-available information of individual cigar rete prices. The study is unique because in addition to our field experiment a rich dataset explained in additional studies from this research group provide us a very detailed picture of the enumerators.

For each enumerator, in additional to sex and smoking condition we collected variables characterizing their level of addiction, personality traits, three different measures of risk aversion, time preferences and negotiation skills via an ultimatum game. This extensive dataset regarding buyers’ information could help us to analyze additional factors influencing their negotiating behavior in the field as well as their outcomes. In addition to our findings, this research is to the best of our knowledge the first time that, survey, lab and field experiment are combined to analyze behavior of smokers and non- smokers in a market for their addictive good. The obtained in-field experienced, learning and capacity gained by of our team and the vast pool of subjects for future research project represent a unique opportunity that can transform social science research in the study of addictive goods and field studies in Mexico.

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