Research 

Published & Forthcoming

Economic Determinants of Ethereum Transaction Fees in the Priority Fee and Proof of Stake Periods (with A. Karaivanov), 2024, Applied Economics

We analyze the economic determinants and dynamics of transaction fees in the Ethereum blockchain before and after two significant platform updates. The first is the August 2021 EIP-1559 "London" upgrade, a switch from user-bid gas price (transaction fee per unit of complexity) to a fee model in which the gas price is the sum of an algorithmically determined base fee and an optional priority fee (tip) chosen by the user. The second update "the Merge" is the switch from proof-of-work to proof-of-stake transactions validation in September 2022. We estimate the impact on Ethereum transaction fees of both demand factors (block utilization, transaction type, ETH price in USD) and algorithmic supply-side factors (the block gas limit and base fee). Using data from nearly 900 million blockchain transactions, we find that the gas price is statistically significantly positively associated with the block utilization rate. A larger share of contract call transactions or legacy (user-bid gas price) transactions is linked with higher gas prices on average. On the supply side, a higher block gas limit is statistically significantly associated with lower gas prices.

Working Papers 

Markup Estimation: Monetary Values or Physical Quantities?[SSRN] 

The standard methods of production function estimation, such as Olley and Pakes (1996), Levinsohn and Petrin (2003), and Ackerberg et al. (2015), which are commonly used for markup estimation, require data on physical quantities of output and inputs. However, due to data limitations, most empirical research on production function parameters relies on monetary values (revenue and/or input expenditures) as proxies for physical quantities. This paper highlights that using monetary values introduces endogeneity problems and leads to biased production function and markup estimates, issues not addressed by current estimation methods. The source of this endogeneity problem lies in the correlation between unobserved prices and input choices, leading to inconsistent estimates. By developing a structural model and utilizing detailed firm-level data from the French manufacturing sector, I implicitly incorporate unobserved prices into the estimation procedure and quantify the omitted price bias, recovering consistent estimates of production coefficients and corresponding markups. My findings reveal that using monetary values instead of physical quantities causes a downward bias of up to 55% in production function estimates and up to 8.5% in markups, suggesting that the degree of misallocation may be significantly understated in empirical analyses, which could result in misguided regulatory and competition policies. Lastly, I obtain consistent markup estimates using three different methods and compare their trends across various industry segments.

The Impact of Buyer's Agent Commission on Home Sales Prices in Greater Vancouver (with M. Rekkas)

This paper investigates the impact of buyer's agent commission structures on home sales outcomes in Greater Vancouver's housing market. Using a hedonic regression model we examine how two-tiered commission rates influence sales prices and time on market for detached residential properties. We find that higher commission rates on the initial segment of the sales price lead to faster transactions and lower prices, aligning agent incentives and buyer preferences. In contrast, higher commission rates on the remaining balance result in higher sales prices and longer selling times, suggesting agents' incentives shift toward maximizing prices. We extend the model to estimate a housing price index and compare it with the MLS index, finding strong alignment despite differences in methodology and regional coverage. Our results reveal that commission structures play a significant role in shaping housing market dynamics, highlighting potential misalignments between agent and client objectives.