Research
Working Papers
"Giving Up": The Impact of Decreasing Housing Affordability on Consumption, Work Effort, and Investment (with Seung Hyeong Lee)
Abstract: Housing affordability has declined sharply in recent decades, leading many younger generations to give up on homeownership. Using a calibrated life-cycle model matched to U.S. data, we project that the cohort born in the 1990s will reach retirement with a homeownership rate roughly 9.6 percentage points lower than that of their parents' generation. The model also shows that as households' perceived probability of attaining homeownership falls, they systematically shift their behavior: they consume more relative to their wealth, reduce work effort, and take on riskier investments. We show empirically that renters with relatively low wealth exhibit the same patterns. These responses compound over the life cycle, producing substantially greater wealth dispersion between those who retain hope of homeownership and those who give up. We propose a targeted subsidy that lifts the largest number of young renters above the "giving-up threshold." This policy yields welfare gains that are 3.2 times those of a uniform transfer and 10.3 times those of a transfer targeted to the bottom 10% of the wealth distribution, while also increasing homeownership rate, raising work effort, and reducing reliance on the social safety net.
Conferences: FIRS 2026 PhD Session (Miami), 1st Annual Workshop in Real Estate Finance (Scheduled, Frankfurt), Georgia Tech - Atlanta Fed Household Finance Conference PhD Poster Session (Atlanta)
Coverage: Bloomberg 1, Bloomberg 2, Washington Post, Financial Times, Fortune 1, Fortune 2, The New York Times, Marginal Revolution, World Economic Forum, The Atlantic, Fox Business, Investopedia, Realtor.com, Macro Roundup, Le Figaro
When Cash Wakes Up: Inertia in Institutional Money Market Funds and the Effects of AI Disruption (with Ali Hortacsu)
Abstract: We study institutional cash management by constructing a novel dataset that records the specific money market funds (MMFs) held by each mutual fund in each month from 2010 to 2024. We document remarkably high inertia: more than half of mutual funds never switched their MMF over fourteen years, despite non-negligible yield dispersion. To decompose the sources of this inertia, we develop a two-stage structural model that separately identifies the determinants of portfolio managers' attentiveness ("waking up") and their conditional preferences once attentive. We estimate the model using a methodology that combines BLP-style contraction mapping with maximum likelihood. We establish three main findings. First, inattention shapes the industrial organization of the MMF market: funds that attract less attentive investors engage in greater liquidity transformation while offering lower yields, earning higher profits and exhibiting significantly greater survival rates especially during low interest rate periods. Second, our framework provides a new explanation for the well-documented "reaching for yield" phenomenon. We show that aggregate flows appear more yield-sensitive during low interest rate periods not because individual investors become more yield-seeking, but because a larger fraction of investors becomes attentive - a composition effect rather than a preference shift. Third, counterfactual analysis reveals a tension between market efficiency and financial stability as AI-driven automation reduces investor inattention: in the absence of inattention, fees fall by approximately half, yield dispersion collapses to near zero, and market concentration declines by roughly 20%, but monthly fund flows increase by about three times which heightens the risk of MMF runs.
Conferences: 14th Consumer Search and Switching Costs Workshop (Hong Kong)
Disagreement, Subjective Uncertainty, and the Stock Market (with Jingoo Kwon and Seung Hyeong Lee)
Abstract: We propose a new method to separately quantify investor disagreement and subjective uncertainty at the firm level using equity analyst forecasts. Our approach exploits heterogeneity in how forecast dispersion responds to the arrival of signals that are widely perceived as informative and interpreted homogeneously across agents. Intuitively, for a given level of disagreement in point forecasts, a larger post-signal compression in dispersion indicates greater ex-ante subjective uncertainty in investors’ beliefs. Using these measures, we document differences in the economic roles of disagreement and uncertainty. Subjective uncertainty rises sharply prior to crises, while disagreement peaks during and immediately after crises. In the cross-section, stocks with higher disagreement earn lower subsequent returns and exhibit higher trading volume. These effects are significantly attenuated when uncertainty is high. In contrast, higher uncertainty is associated with higher expected returns and lower trading volume. Stock return volatility is strongly related to disagreement but only weakly related to uncertainty. Finally, firm characteristics are more closely linked to disagreement than to uncertainty: Smaller firms, firms with lower profitability, and firms with higher R&D intensity exhibit systematically higher levels of disagreement.
Conferences: 3rd UIC Finance Conference (Chicago), FIRS 2025 PhD Session (Seoul), 2025 World Congress of the Econometric Society (Seoul), Yiran Fan Memorial Conference Poster Session (Chicago), 19th WashU Economics Graduate Student Conference (St. Louis)
The Market for Antibiotics: Sorting, Signals, and Regulation in Western Kenya (with Michael Dinerstein and Anne Karing) (AEA Registry)
Abstract: Antibiotic use creates a dynamic externality through antimicrobial resistance, and in many settings antibiotics are allocated in healthcare markets with private information. Because antibiotics are valuable for bacterial infections but costly when unnecessary, effective policy must screen across unobserved patient types rather than simply reduce use. We study this problem in retail health markets in western Kenya, where prescription enforcement is weak, patients choose between pharmacies and clinics, and drug requests are common. We combine a census of 697 providers in 55 markets, provider surveys with clinical vignettes, patient exit surveys, and a standardized patient study that randomizes patient requests and symptom disclosure. We then embed the estimates in a structural model. Patients sort across distinct encounter types: no-prescription pharmacy visits are request-heavy and retail-oriented, while clinics are consultation-oriented and see a more infectious case mix. Under current sorting, roughly one-third of classifiable real-patient transactions are AMR-risky. The experiments show that requests causally affect treatment: in mild respiratory cases, an inappropriate antibiotic request lowers AMR-appropriate treatment by about 20 percentage points, while an appropriate non-antibiotic request raises it by about 10 percentage points. In these cases, inappropriate antibiotics are typically added to otherwise appropriate symptom-relief bundles. We estimate a model in which patient requests signal both perceived bacterial risk and demand for antibiotics when they are not clinically indicated. Providers observe requests, choose diagnostic effort, and decide whether to dispense an antibiotic and, if so, whether it is a full-dose first-line regimen. Counterfactuals show that the mixed pharmacy-clinic market targets antibiotics better than either a pharmacy-only or clinic-only market because patient sorting and requests transmit useful information. Antibiotic taxes also improve targeting: use falls primarily among non-bacterial cases, while access for bacterial cases is largely preserved. The tax works not only by changing provider incentives, but also by changing who requests antibiotics and what those requests reveal in equilibrium. More broadly, the results show that regulating socially costly good requires accounting for the market process that reveals who should receive them.
Conferences: LEAP Conference (Milan)
Addiction Runs: Rank Competition and Strategic Complementarities in Prescription Stimulant Usage (with Chanwool Kim and Giyoung Kwon)
Abstract: We study the rise of prescription stimulant use for academic performance using a model with relative-performance externalities. Students compete for rank, where taking a stimulant improves effective performance but entails costs. Because payoffs from academic competition depend on others' performance, students' stimulant usage exhibits strategic complementarities: as more individuals use stimulants, others face stronger incentives to follow in order to avoid falling behind. We identify the model using prescription trends in the U.S and our own survey evidence on students' incentives, beliefs, and perceived costs. The estimated strategic complementarities are large enough to generate multiple equilibria, including one with low use and another with very high use, in which around 90 percent of students take stimulants. We use the estimated model to evaluate policies that (i) reduce the salience of relative evaluation, (ii) limit the competitive advantage conferred by stimulants, particularly through academic accommodations, (iii) separate academic competition between stimulant users and non-users (i.e., separate curves), and (iv) tighten prescribing standards to reduce non-medical use. Our estimates show that separate curves yield rankings that most closely reflect underlying ability and are the policy that least discourages true ADHD patients from taking prescribed stimulants.
Awards/Grants: BFI Public Economics Initiative Award ($3,000)
Work in Progress
Households' Liquidity Management and Endogenous Sorting of Bank Depositor Types
Awards/Grants: Fama-Miller Center for Research in Finance Funding ($10,000), Kenneth C. Griffin Applied Economics Incubator Award ($10,000)
Youth Runs (with Luis Garicano)
Retail Drugstore Closures and the Declining Drug-Retail Complementarity (with Chanwool Kim)
Awards/Grants: Kenneth C. Griffin Applied Economics Incubator Award ($12,000)
Package Sizes and Unequal Burden of Inflation (with Chanwool Kim and Youngeun Lee)
Housing Tenure as an Investment Decision: Evidence from Survey and Field Experiments (with Chanwool Kim)
Other Publications
Chicago Fed Letter, 464 (2021), 1-6.
Abstract: A half century after gold ceased to play a significant formal role in the international monetary system, it still captures a great deal of attention in the financial press and the popular imagination. Yet there has been very little scrutiny of the primary factors determining the price of gold since its dollar price was first allowed to vary freely in 1971. In this article, we attempt to fill in that gap by highlighting three considerations that are commonly cited as drivers of gold prices: inflationary expectations, real interest rates, and pessimism about future macroeconomic conditions.
Coverage: J.P. Morgan Center for Commodities
