“The Valuation of Local Government Spending: Gravity Approach and Aggregate Implications” (Job Market Paper) Draft

How much do people value local government spending? What are the effects of fiscal transfers that finance this spending? I develop a spatial equilibrium framework where people’s simultaneous (internal) migration and commuting choices reveal preferences. I combine this framework with administrative data from South Korea and leverage the plausibly exogenous variation in local government spending across districts induced by national tax reforms in 2008 and 2012. The estimated mobility responses imply that workers value each additional dollar of per-capita local government spending by 75 cents of their after-tax income. The general-equilibrium counterfactuals imply that a fiscal arrangement with lower redistribution would result in aggregate gains. A key aspect of my analysis is that bilateral migration and commuting decisions are made jointly. I show that ignoring any one of these margins biases the estimates of preferences for public goods, distance elasticities of migration or commuting, and the aggregate effects of alternative fiscal arrangements.

“Does Pro-Natalist Cash Transfer Work? The Case of South Korea” Draft

Once characterized with high fertility rates, many countries now experience fertility rates below the 2.1-replacement level and have implemented various policy tools to encourage births to mitigate demographic imbalance. Since 1983, the total fertility rate of South Korea has continually stayed below the replacement level and reached the lowest in the world in 2005. This paper exploits a unique setting in South Korea to identify the effects of local pro-natalist cash-transfer policies on fertility and finds positive causal effects. In particular, a cash transfer of 1,000 USD increased the total fertility rate by 0.22 children per woman or 8 percent. Next, decomposing total fertility rates by birth parity and age of mothers, I conclude that the pro-natalist cash transfers had parity-specific effects and did not have effects on fertility rates of adolescents. Lastly, I find no evidence of changes in health outcomes at birth and exacerbation of son preference due to the cash transfer.

“Learning by Doing and Learning from Others: Evidence from Airbnb Listings in Greater New York”, with Do Young Yoon

In this paper, we ask how individual Airbnb listers set their prices. In order to price optimally, listers need to know the demand for their listings. We propose that listers can learn about the market demand from two different sources. First, listers may learn from the occupancy rates and the prices of the listings around their properties (spatial learning or learning from others). Second, they can accumulate their knowledge about the market demand over time (dynamic learning or learning by doing). We adopt a stylized model in which a lister makes a price decision based on the history of own prices and consequent revenues as well as those of the other properties around his/her property. Using the universe of individual Airbnb listings in the greater New York from 2014 to 2018, we evaluate how much each of these two learning mechanisms explains the observed prices over time and over their tenure as Airbnb listers.

“External Costs of International Trade”, with Yasheng Zhang

The export demand for Chinese products has dramatically increased over the last several decades. At the same time, expanding goods production in China has coincided with an increase in pollution in the neighboring countries, as well as in China. The primary objective of this new project is to measure the external costs resulting from international trade. Specifically, we are going to leverage the rich individual-level data on the universe of national health insurance spells from 2000 to 2014 in South Korea to measure the effects of pollution born in China on the population health in South Korea (e.g., incidences of air-born disease and healthcare expenditure). We estimate the cost of pollution in dollar values and the spatial decay of pollution (i.e., how much pollution is lost over its travel across space). In order to understand the link between the pollution and Chinese export demand, we develop a spatial equilibrium model in which firms (industry specific) choose where to locate across Chinese prefectures. Two key aspects of the model are (1) spatial units are heterogeneous in industry-specific productivity and (2) we model the production of goods as well as pollution motivated by the fact that different industries are responsible for different pollutants. Then, through the lens of the model and based on the estimates associated with external costs of pollution, we would like to quantify the total costs of pollution rising from the demand for Chinese goods, which the previous literature has missed out when thinking about gains from trade.