I am an Assistant Professor at the Institute for Economic and Social Research, Jinan University.

I received my Ph.D. in Economics from the University of Melbourne in 2018.

My main research interests are in macroeconomics with issues in the housing markets. I am also interested in the macroeconomic implications of household heterogeneity and incomplete markets.

Link to my CV in pdf

Email: yunho.cho[at]outlook[dot]com

Working Papers

Household Balance Sheets and Consumption Responses to Income Shocks (with James Morley and Aarti Singh) - Paper

We examine how households with different balance sheet positions respond to income shocks using panel data from the U.S. and Australia. Our main findings are the following: (i) mortgaged owners are more sensitive to transitory income shocks than renters and outright owners in the U.S.; (ii) households with higher debt also have higher consumption responses to transitory income shocks relative to households with lower levels of debt in the U.S. This group of households is distinct from households with low liquid wealth, who also respond sensitively to transitory income shocks; (iii) time-varying estimates suggest that consumption of households with higher levels of debt, mortgage owners in our sample, exhibited greater sensitivity to transitory income shocks during the Great Recession and during the recent housing boom in Australia; and (iv) in both countries, households with higher net wealth, mortgaged and outright owners, have more consumption insurance against permanent income shocks. Our results provide new insights into the relationship between household balance sheets and household consumption and how this relationship has changed over time.

Negative Gearing and Welfare: A Quantitative Study of the Australian Housing Market (with May Li and Lawrence Uren) - Slides, Paper

We build a general equilibrium overlapping generations model with incomplete markets and heterogeneous agents to study the welfare implications of negative gearing tax associated with housing investment in Australia. Comparing across the stationary equilibria with and without negative gearing, we find that removing negative gearing would greatly reduce housing investments particularly by younger households with high income, resulting in lower house prices and higher rents, as well as higher homeownership rate. The steady state welfare analysis suggests that, when measured by ex-ante consumption equivalent variation, eliminating negative gearing would lead to a welfare gain of 1.2 percent. Through a series of counterfactual policy experiments, we show that redistribution is a key mechanism for the welfare gains. Along the transition, the policy change would benefit renters and lower income households while it hurts younger landlords who earn higher income.

Media coverage: The Age, The Sydney Morning Herald, The Guardian, NEWS.com.au, The Australian, SBS News.

House Prices, Rents and Taxation: A Simple Model - Paper

This paper presents a tractable overlapping generations model to study the equilibrium behavior of house prices and rent. Households derive utility from non-durable consumption goods and housing services, which are obtained via renting or owning. Purchasing houses also provides households with an alternative source of saving, yielding a flow income and potential capital gains or losses. Individual heterogeneity in preferences for homeownership leads to endogenous segmentation of households into homeowners and renters, and generates a unique equilibrium in both the housing and rental markets where house prices grow at the rate of economic growth. The model is used to understand the effect of taxation and the implications of housing tax policies on house prices.

Homeownership and labor market outcomes: Oswald's hypothesis revisited (with Lawrence Uren) - Paper (New draft coming soon)

Blanchflower and Oswald (2013) shows that high homeownership may generate negative externality to the labor market outcomes. Motivated by this, we examine the causal effect of homeownership on the labor market outcomes by exploiting the cross-sectional variation in housing supply elasticity by Saiz (2010) to instrument for homeownership rates. We find that the elasticity of homeownership on employment-to-population ratio is -0.4, which has a consistent qualitative interpretation with Blanchflower and Oswald (2013). We show that high homeownership could impair the labor market by restricting labor mobility. Furthermore, we show that the decline in employment due to high homeownership can be amplified when there is a collapse in house prices.

Work in Progress

Welfare and Property Transaction Taxes (with May Li and Lawrence Uren)

Property Tax in China: Who wins and loses? (with Jiajia Gu)