Abstract: One of the Korean medical system characteristics is a dualized medical system in which western and Korean medical services coexist. Consumers’ choices are made by maximizing their utility by considering two medical services’ substitution or complementation relationship. We focus on this particular aspect of the Korean medical system and provide a new approach to analyzing the medical demand in a dual health care system using a structural economic theory. To this end, we use Grossman’s model to develop a model for two medical services. We derive the demand function of medical service and its elasticities under the consumer’s utility maximization problem. Also, we use Korea Health Panel data from 2015 to 2018 to empirically figure out medical demand functions by a random-effects model. For the patients who visited western and Korean medicine clinics for diseases of the musculoskeletal system and connective tissue, we find evidence that the medical demand is the necessity and decreasing in its price. In addition, consumers use two types of medical services as substitutes. Moreover, the demand is increasing in age and decreasing in the level of education. These are consistent with the theoretical prediction of the Grossman Model. This approach will enable the analysis of economic assessments of efficiency for the healthcare policies in a more rigorous way.

Abstract: This study examines the impact of university locations on the college wage premium by using data from the Korea Education Employment Panel (KEEP) to analyze The effect of the treatment of college graduates in the Seoul area on the college wage premium is analyzed through the treatment group of university graduates in the Seoul area and the comparison group of university graduates in the Non-Seoul area to estimate the degree of difference in the college wage premium. In addition to the parametric method which is used in previous studies such as regression, Stochastic dominance testing is used to compare the whole distribution of target variable. Main results are as follows. The wages of university graduates in Seoul were 8%(OLS), 14%(college fixed effects), 26%(Hausan-Taylor’s IV estimator) higher when all other conditions were constant compared to those of college graduates in Non-Seoul. In addition, results of stochastic dominance tests showed that the hypothesis that the distribution of wages for graduates of universities in Non-Seoul first and second order stochastically dominate to those of college graduates in Seoul are rejected. Hence, we can conclude that the expected utility of college graduates in Seoul are higher than those of college graduates in Non-Seoul College wage premium for college graduates in different regions is due to the signal effect. This suggests that support policies for local universities would be more effective in a way that would ease information uncertainty to make companies screen students better, than direct support.

Abstract: This study examines the impact of incorporating financial stability into monetary policy on the real economy, particularly in response to various macroeconomic shocks. Following the global financial crisis, the Bank of Korea explicitly began considering financial stability with the 2011 revision of the Bank of Korea Act. Traditional monetary policy, typically represented by the Taylor Rule, uses inflation and output gaps as information variables. In contrast, this study defines financial stability-oriented monetary policy as one that includes additional information variables related to the financial market, such as housing price and credit gaps. A general equilibrium model was established, incorporating credit frictions and collateral constraints, and its solutions were derived using method proposed by Uhlig (1999). Simulation results indicate that under financial stability-oriented monetary policy, the volatility of output and prices in response to shocks (interest rate, inflation, and housing price shocks) is reduced compared to traditional monetary policy. Consequently, welfare, measured as the weighted sum of the standard deviations of various variables, is improved, suggesting that monetary policy considering financial stability is socially more desirable than traditional approaches.

• Nearest Neighbor Algorithm for using Individual ID: [SAS Code]
• Semi-Supervised Classification Methods: [Slides]
• Switching Model for Classification: [Slides]

• Determinants of Korean Housing Market using Double Selection: [Slides]

• Implementation of Barrett and Donald (2003): [Matlab/R/Stata (Mata)/Python]
  — Barrett, Garry F., and Stephen G. Donald. “Consistent tests for stochastic dominance.” Econometrica 71.1 (2003): 71-104.
• Implementation of Linton, Maasoumi, and Whang (2005): [Matlab/R/Stata (Mata)/Python]
  — Linton, Oliver, Esfandiar Maasoumi, and Yoon-Jae Whang. “Consistent testing for stochastic dominance under general sampling schemes.” The Review of Economic Studies 72.3 (2005): 735-765.

• Matching with SQL: [SAS]