JOB MARKET PAPER
"Are Larger Markets More Pandemic-Resilient? Evidence from the South Korean Restaurant Industry" (joint with Christopher Paik)
Abstract:
This paper evaluates the effect of COVID-19 on the restaurant industry in South Korea. Media coverage reports both reduction in dine-in customers and surge in delivery and take-out orders for restaurants, thus we rely on ex-post outcomes by using the aggregated district-level market data of restaurants in South Korea between 2019 and 2020. We use regression discontinuity (RD) design by comparing weeks just before and after the late January 2020 for the effect on market-level restaurant entry, exit and revenue. Factoring in seasonal effects and demographic variables, the average level of entry decreases post-outbreak by approximately 41%, and the effect is greater in the bottom 50% markets in market size, as well as in the level of accessibility to Seoul Capital Area. These results show that firms in larger markets are more pandemic- resilient, likely due to having higher portion of online and mobile orders compare to dining-in orders already prior to COVID-19. Policymakers may implement a policy to ensure smaller and less-metropolitan markets to become more pandemic-resilient, by improving the system and off-premise infrastructure to offset the reduced dine-in revenues with increased deliveries and pick-ups.
Draft can be viewed here
OTHER WORKING PAPERS
“How Would You Like To Pay For This and Why?: Demand Estimation of Payment Choices”
Abstract:
Every time a consumer decides to buy a good or service, she is faced with a decision; what should I pay with? Because each payment instrument features different characteristics (i.e. cash and debit card are liquid instruments while credit card isn’t), each consumer with different constraints may choose to pay with a different payment instrument. Using a nation-wide consumer survey on payment instruments and their usage in South Korea, we computed the parameter estimates that can be inferred with structural behavioral responses of the consumers. While the previous literature using consumer survey on ranking of payment choice assumed ‘typical point-of-sale transaction’ with no information on each transaction, this paper attempts to provide more explanation of consumer’s behavior by using different ranking outcome variables from the survey based on the amount, type of good or service purchased, and type of business or location for the transaction at checkout. The result shows that older consumers prefer liquid but dislike electronic instrument and the overall consumers payment instruments that are widely accepted by merchants.
Draft can be viewed here