Davide Zufacchi

Davide Zufacchi

Davide Zufacchi

I am a PhD candidate in Economics at University College London, and a PhD scholar at the Institute of Fiscal Studies. I am an applied microeconomist studying questions in Empirical Industrial Organization and Development Economics.

You can find my CV here. I can be reached at davide.zufacchi.20@ucl.ac.uk

Job Market Paper

Competition and Violence in Illegal Markets: Theory and Evidence from Naples

Abstract: This paper studies how market structure-the number and distribution of competitors-shapes the use of violence in illegal drug markets. Using new data on gangs, conflicts, and drug seizures from Naples, I document that fighting reduces the number of active gangs, but it also generates violence, which attracts police attention and disrupts the drug market. I develop and estimate a quantitative model of an oligopolistic market in which consumers choose where to buy drugs, gangs fight to expand market share, and police responds endogenously. The results reveal an inverse U-shaped relationship between market fragmentation and violence, reflecting the combination of a declining probability of conflict with an increasing intensity of each fight. I evaluate three enforcement strategies (kingpin targeting, selective enforcement, and drug legalization), allowing their effects to depend on the initial market structure. This approach, in the spirit of the entry-deterrence literature, reconciles seemingly contradictory evidence on enforcement and violence in illegal markets.

Presented at: University College London; Institute of Fiscal Studies; Northwestern University; University of Chicago - Harris; Oxford University - OXDEV 2025; NBER Economics of Firearm Markets, Crime, and Gun Violence 2025; London School of Economics; ASSA 2026

Grants: Laboratory for Effective Anti-poverty Policies (LEAP), Bocconi University

Working papers

  • From Forests to Plantations: Agricultural FDI in the Liberian’s Palm Oil Sector, with Tommaso Sonno
    Details

    Abstract: Agriculture in low-income countries leaves suitable land uncultivated, occupies most of the workforce almost entirely in self-employment, and produces very little. We explore how this equilibrium changes with agricultural FDI, studying palm oil land acquisitions in Liberia, and comparing land and households just inside and just outside the same concession boundary before and after the grant. Imports of the fertilizers, harvesting tools and extraction machinery the crop requires rise sharply, with no comparable increase for similar non-palm oil specific products. Forests are converted to plantations: tree cover falls by around 4 percentage points and the decline is followed by an increase in palm oil coverage. Agricultural wage employment rises by 6.3 percentage points for wives and 7.3 for husbands, against control means of 1.6 and 8.1 percent. Reported ownership of agricultural land does not decreases, so this is not the mechanical consequence of change in land ownership. These results are consistent with a two-sector account à la Lewis (1954): as capital expands in the sector, land is converted to plantations, labour moves into wage employment, and production expands.

    Presented at: Bologna University; Ghent University; Bocconi University; Online Political Economy Seminar Series; Universitat Autonoma de Barcelona; University College London; Queen Mary University of London

    Grants: Modigliani Research Grant, Unicredit Foundation

  • Digging Deeper: Mining Companies and Armed Bands in the DRC, with Eliana La Ferrara
    Details

    Abstract: We investigate the relationship between armed groups and large-scale mining firms in the Democratic Republic of Congo using geo-referenced data from 2000 to 2015. The pattern of interactions between armed bands and concession owners significantly deviates from a random benchmark. To understand the reasons behind this non-randomness, we develop a statistical test that assesses the plausibility of different explanations based on the observed data. Our results indicate that an active relationship is the only scenario consistent with the pattern of repeated interactions. We further explore the nature of these relationships and find evidence supporting the existence of two types of equilibria, depending on the type of mineral extracted in the concession. The first is a cooperative equilibrium, where armed groups provide services to mining firms, including clearing the territory of competing groups. The second is an adversarial equilibrium, where companies and militias compete for natural resources, leading to increased violence around the concessions.

    Presented at: Harvard University; Harvard Kennedy School; PIEP Conference; Washington University; University College London; Bocconi-LSE joint Crime seminar; ENS Lyon; Toulouse School of Economics; CEPR Paris Symposium 2023; CEPR-RPN on Geoeconomics and RPN on Preventing Conflict: Policies for Peace; World Congress of the Econometric Society

Working in Progress

  • Optimal product customization, with Elena Spadini
  • Uncertainty shocks, production, and competition, with Tommaso Sonno
  • Justice at a Price, with Magdalena Dominiguez

Policy Reports

  • About Risk Premiums: from country, to region, towards firm (2025). Joint with Tommaso Sonno, Irene Rizzoli, Jeremy Boccanfuso, and Vincenzo Scrutinio

  • Regional Risk Premiums: a new approach to risk premiums (2024). Joint with Tommaso Sonno, Jeremy Boccanfuso, and Vincenzo Scrutinio

  • Country Risk Premiums: what we know and why they are not working well (2023). Joint with Tommaso Sonno, Jeremy Boccanfuso, and Vincenzo Scrutinio

  • Peace Impact of Private Investments: Evidence from Multinationals investments in Africa (2022) Joint with Tommaso Sonno.

  • Voucher: uso e contestualizzazione alla luce del Covid-19 (2020). ADAPT Working Papers. Joint with Enrico Cavallotti, Maddalena Conte, Sergio Inferrera, Lorenzo Navarini, and Filippo Passerini (in Italian).

Teaching Assistant

I was nominated for the Student Choice Awards (UCL student union) in 2023

  • ECON0023 - International Trade (BSc), University College London, TA for Lucas Conwell, Fall 2024 (Evaluation: 4.70/5 - 2025)

  • ECON0030 - Issues in Economic Development (BSc), University College London, TA for Valerie Lechene and Marcos Vera-Hernández, Spring 2024 (Evaluation missing due to UCL change of policy)

  • ECON0038 - The economics of money and banking (BSc), University College London, TA for Silvia Dal Bianco, Spring 2023 (Evaluation missing due to UCL change of policy)

  • ECON0054 - Development Economics (BSc), University College London, TA for Beatriz Armendariz, Fall 2021,2022 (Evaluation: 4.11/5 - 2022)

  • ECON0060 - Advanced Microeconometrics (MSc), University College London, TA for Lars Nesheim and Liyang Sun, Spring 2022,2023,2024,2025 (Evaluation 4.73/5 - 2022, Evaluation 4.83/5 - 2025)

  • ECON0124 - Topics in Development Economics (MSc), University College London, TA for Gabriel Ulyssea, Spring 2022 (Evaluation: 4.33/5 - 2022)

Public goods

Economics of Crime - syllabus here.

Development Economics - syllabus here.

Empirical Industrial Organization - syllabus here.

Outside the office