Working Papers

Distributional Impacts of Centralized School Choice, with Jaewon Lee, Reject & Resubmit, Journal of Political Economy

Informational frictions in centralized school choice can significantly influence its distributional consequences. Recognition of such frictions is also necessary to accurately measure welfare. We build a model of school applications, allowing applicants to consider only a limited set of schools and to have mistaken beliefs about their admission chances. Quasi-experimental variation and rich information in students’ rank-ordered lists enable identification. Utilizing this model, we evaluate the impacts of centralized school choice in New York City on racial segregation and equity in welfare, decomposing the contributions of the frictions and the preferences of students and schools. We also quantify matching stability and deviations from truthful reporting. Our results show that while school choice improves welfare across races, limited consideration substantially compromises these gains, particularly for Black and Hispanic students. A counterfactual policy involving personalized school recommendations designed using our model is projected to recover 20–36% of the welfare losses.

Senior Transit Subsidies and Welfare, with Kanghyock Koh, Jungsuk Lee, and Jintaek Song

This paper leverages a quasi-experimental policy based on an age threshold in Korea and novel cellphone mobility data to assess the welfare consequences of granting older adults free subway access and to inform optimal policy design. We document that the subsidy increases seniors' subway rides without reducing car rides. We also find that residents in higher land-value areas experience larger increases in mobility. We then estimate a hierarchical nested logit model of transportation mode choices to evaluate the current policy and its alternatives, capturing equilibrium congestion effects. Demand changes near the age-65 threshold identify the nesting structure and key substitution parameters. Our simulations reveal that congestion costs are substantial, forming 70% of the total welfare cost, and 85-90% of it accrues to non-seniors. A consumer-surplus-equivalent policy offering equal discount for both buses and subways dominates the current policy across extensive configurations of Pareto weights and uninternalized health benefits. The optimal discount amount depends sensitively on intergenerational distributional preferences. 

Externality of Driving Luxury Vehicles and Optimal Taxation, with Jaewon Lee and Jintaek Song

Under tort law, where the at-fault driver is responsible for covering the repair costs of another party, driving a luxury vehicle with higher repair costs creates a negative externality. A Pigouvian tax on luxury vehicles or a vehicle-value-based premium can help internalize this externality. Using novel micro-level data on automobile sales and repair costs and leveraging the introduction of a luxury vehicle tax in British Columbia, we demonstrate that a typical luxury vehicle generates an externality of $0.10 per dollar of vehicle cost. We estimate a structural model showing that the optimal tax would increase welfare by 0.8% of the British Columbia automobile industry's value, extrapolating to an $8 billion increase in the U.S. automobile market.

Work in Progress

Disentangling School and Peer Effects: A Non-linear Approach with School Lotteries, with Mariana Laverde and Minseon Park

Monopsony in a Two-sided Matching Market, with Daisuke Adachi and Shintaro Yamaguchi

Pre-doctoral Publication

(In Korean) Parental Wealth, Children’s Ability and Entering Prestigious Colleges, with Se-Jik Kim and Keunkwan Ryu, Korean Economic Journal 54.2 (2015): 356-383. [paper]