Myongjin Kim

Strategic Responses to Used Goods Markets: Airbus and Boeing

This paper examines the relationship between innovation, production, and used-good markets, then evaluates government subsidies to Airbus and Boeing, which have recently been ruled illegal by the WTO. This research sheds new light on the crucial role of innovation as a competitive tool against used-good markets. Moreover, this paper shows that a production or RD in the aircraft manufacturing industry, a production subsidy reduction has a bigger negative impact on innovation than subsidy reduction in research and development. Finally, this paper nds that, though it reduces innovation and production, the cut in the government subsidies has a minor eect on consumer welfare due to the presence of active used-goods markets.

Does Job Satisfaction Increase Sales and Customer Satisfaction? Evidence from Retail Banking in South Korea

Abstract This paper estimates the causal relationship between job satisfaction and worker productivity. Using personnel records from a retail bank in South Korea, we show that branch productivity is positively associated to average job satisfaction, but negatively to its standard deviation. We address endogeneity concerns using IV strategies and find that while higher job satisfaction may increase short term productivity through sales to existing customers, excessive sales to existing customers may hurt customer satisfaction and willingness to recommend in the long run. Our findings suggest that average job satisfaction and its dispersion are equally important to understand worker productivity.

When Do Firms Offer Higher Product Quality? Evidence from the Allocation of Inflight Amenities

This study examines when firms offer higher product quality. We measure product quality by examining four different inflight amenities provided by airlines: Wi-Fi, seat size, entertainment, and seat power. Using daily flight level data for over 800 routes and spanning nine weeks in third quarter of 2015 we observe that carriers were actively retrofitting aircraft to expand their inflight amenity offerings. We find significantly lower product quality (Wi-Fi, entertainment, and power) on more concentrated routes. While considerable research has been done on airline pricing, less well known is how airlines pursue other revenue streams from ancillary services. Recent work by Brueckner et al. (2015) explores the role of baggage fees in airline pricing. We examine additional revenue streams provided by Wi-Fi and entertainment inflight amenities. We find that carriers are lowering the posted base ticket prices on routes with Wi-Fi and entertainment and then charging passengers for using these amenities. The IV price estimates reveal that magnitude of the posted fare reduction is larger than the additional revenue generated from the inflight amenity.

Help or Hindrance? U.S. Aid on Growth

We distinguish between U.S. aid and non-U.S. aid and study the effects on growth in recipient countries. Our analysis exploits time variation in aid due to changes in the supply of U.S. aid and cro...

Market Definition Changes the Story: Competition and Price Dispersion in the Airline Industry Revisited

We analyze the effect of competition on price dispersion in the airline industry and show that the outcome hinges on redefining the extent of a market. Using panel data from 1993 to 2013, an increase in competition has a positive effect on price dispersion in one-way markets but a negative effect in round-trip markets. This is driven by a bigger (smaller) decrease in the 10th percentile of the price distribution in the one-way (round-trip) markets. We provide suggestive evidence that airlines compete more aggressively in the lower tail of the price distribution in one-way markets due to higher markups.

Gender Gap in Tenure & Promotion: Evidence from the Economics Ph.D. Class of 2008

This study examines early career outcomes (i.e., tenure and promotion) of the Economics Ph.D. class of 2008. We find that relative to males in the same cohort, female economists are less likely (by about 14%) to have received tenure and promotion eight years post-graduation. The gender gap becomes more pronounced (of 26%) among individuals of foreign origins working in the U.S. In addition, we find a similar gender bias regarding whether an individual remains in academia since the initial job placement in 2008. Our paper contributes to the literature by examining a new and growing dimension of the labor market for economics Ph.D.s, i.e., women and internationals.

Are More Satisfied Workers Earning More? Depends on the Age

In this paper we study the relationship between job satisfaction and wages using data from the 2013 Scientists and Engineers Statistical Data System (SESTAT). Job satisfaction is positively correlated with wages, however, this effect diminishes as job satisfaction increases, suggesting more satisfied workers are not earning more. This non-monotonic effect is particularly strong in the 20-39 age group. We find that one standard deviation increase in job satisfaction from the 25th percentile is associated with a 12.3% increase in wages, while one standard deviation increase in job satisfaction from the 75th percentile is associated with a 7.3% change in wages. These patterns are consistent with a search and matching model that imposes a negative search cost for higher wages, but less reward in higher wages from a concave utility function in wages.

Does Competition Increase Quality? Evidence from the US Airline Industry

In this paper we study the impact of competition on the provision of quality in the US airline industry. Using changes in competition triggered by LCC entry and airline mergers, we find that an increase in competition increases the provision of quality of major incumbent and non-merging airlines by increasing the number of flights and seats available in a route as well as improving their on-time performance with less frequent cancellations and flight delays. Contrary to previous findings in the literature, our evidence suggests that an increase in competition unambiguously increases consumer surplus since prices go down and quality goes up.

One for All or All for One: Does the Category Captain Play Favorites

Category management is challenging for retailers that sell thousands of products across hundreds of categories and often lack the resources and capabilities to manage all of them intensively. Picking one supplier to be the category captain (CC) to manage the category – including rival’s brands – through pricing and merchandising is a recent retail management initiative that aims at improving a retailer’s overall performance in a product category. Despite tremendous retailer and manufacturer interest in CC and its adoption in the industry, much uncertainty exists about the consequences of CC. This paper empirically examines the role of CC by utilizing a unique data set on ready-to-eat cereals category, characterized by high concentration and market power, before and after the transition into category captain management. We find that after the transition, CC acted to improve its own market shares and those of private labels. A private label is designating a product under the name of the retailer rather than the name of the manufacturer and often offers higher profit margins for the retailer. In addition, CC improved its market shares by focusing on its core competency brands at the expense of some of its smaller brands while CC improved private labels’ market shares through an uniform increase across all private label brands. Using estimates from a structural model, we find consumer welfare is increased by 8.8% after the transition into category captain management.