"Firm Decision Dynamics under Environmental Regulation: Evidence from the European Union Emission Trading System" (with Robert Miller)
Leveraging detailed data from the EU carbon permit market, this study examines how firms’ market share and emission intensity influence production and permit transactions after a major EU ETS reform. Firms with higher carbon inefficiency improve efficiency while purchasing more permits, suggesting they anticipate higher future permit values, potentially discouraging efficient firms from selling. Auction data analysis reveals patterns of permit accumulation and inefficiencies in price formation. Building on these insights, the study proposes a dynamic framework to better understand price formation in markets with newly introduced property rights, high heterogeneity, and private value uncertainty.
"Optimal Climate Treaties as Delegation with Externalities: The Case of Dynamic Carbon Production" (with Ali Shourideh)
This paper analyzes an international climate agreement that delegates carbon production to individual countries. Extending Harstad’s (2012) dynamic model, we examine a continuum of countries with heterogeneous, privately known, and persistent carbon preferences. We show that a dynamic cap is optimal only under limited conditions, even with perfect enforcement. Additionally, we identify non-monotone policy functions where the principal compensates agents over time. This study aims to characterize optimal climate agreements under different enforcement scenarios, considering the dynamic externalities of countries’ choices.
"Impact of temperature and humidity on the spread of COVID-19: local transmission and global trends" (with Wontae Hwang, Soohyung Lee, Steven Barrett, Han June Park, Sung-Gwang Lee, and Jeong Suk Oh) PLoS ONE 17.8 (2022): e0271760.
cited in Chosun, Aug. 11, 2021 | Manuscript
During the COVID-19 pandemic, analyses on global data have not reached unanimous consensus on whether warmer and humid weather curbs the spread of the SARS-CoV-2 virus. We conjectured that this lack of consensus is due to the discrepancy between global environmental data such as temperature and humidity being collected outdoors, while most infections have been reported to occur indoors, where conditions can be different. Thus, we have methodologically investigated the effect of temperature and relative humidity on the spread of expired respiratory droplets from the mouth, which are assumed to be the main cause of most short-range infections. Calculating the trajectory of individual droplets using an experimentally validated evaporation model, the final height and distance of the evaporated droplets is obtained, and then correlated with global COVID-19 spread. Increase in indoor humidity is associated with reduction in COVID-19 spread, while temperature has no statistically significant effect.
"COVID-19 and Employment in South Korea: Trends and Comparison with the 2008 Financial Crisis" (with Soohyung Lee) Seoul Journal of Economics 34.1 (2021): 43-80. Also in IZA DP No. 14101
earlier version cited in ChosunBiz, Oct. 7, 2020 | Manuscript
We examine the impact of COVID-19 on employment in South Korea as of June 2020. To estimate the causal effect, we use two complementary methods. First, using individual-level data without residence information, we estimate the effects by controlling for detailed characteristics of individuals. Second, using aggregate data without individual characteristics, we exploit the regional variation in the intensity of COVID-19 to measure the effects. We find that the COVID-19 pandemic decreased the employment rate by 0.82%p and increased the unemployment rate by 0.29%p. These estimated effects are 90-140% larger compared to those of the 2008 Financial Crisis.
"Does Ramadan Harm Infant Health? Evidence from Ethiopia." (with Soohyung Lee, Daeun Jeong, and Wonmoon Lee) International Economic Journal 34.4 (2020): 613-633.
We examine the impact of religious practices on human capital in the context of Ethiopia. We focus on Ramadan, which leads mothers to reduce nutritional intake during the daytime. By exploiting the variation in the extent to which infants were exposed to Ramadan, we estimate the relative disadvantage of Muslim children compared to their non-Muslim counterparts. We find that the exposure to Ramadan in the first trimester has a significant negative effect on the infants’ health outcomes, but not on later life outcomes.
"Impact of the Clean Air Act on air pollution and infant health: Evidence from South Korea" (with Soohyung Lee, and Heesun Yoo) Economics Letters 168 (2018): 98-101. Also in IZA DP No. 11542
presented in 2018 spring conference held by the 'Korea Association of Public Finance' | Manuscript | Slides
This paper examines the extent to which the 2005 Clean Air Act introduced in South Korea affected air pollution and infant health. To identify the causal effect, we exploit the time and geographical variations in the adoption of the Act between 2003 and 2006. During this period, the Clean Air Act indeed significantly reduced air pollutants. For example, the PM 10 level was reduced by 9 percent. However, the Act’s impact on infant mortality was not statistically significant.