Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
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Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Journal of Economic Theory and Econometrics (JETEM) is a peer-reviewed, internet-based, open-access international journal aiming to publish high-quality papers in all areas of economics. JETEM is the official publication of the Korean Econometric Society, carrying papers written either in English or in Korean. In this web-site, all articles are fully downloadable free of charge

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Recently Published Articles

Volume 34, Issue 4 (December 2023)




Cover
Abstract | PDF (148 kilobytes)

No abstract is available for this article.


Optimal Assignment of Soldiers to Service-Units: A Supply and Demand Framework, Pages 1–35

Miri Park, Joonbae Lee

Abstract | PDF (213 kilobytes)

This study proposes a method for improving the quality of the soldierto-
service-unit assignment of mandatory service soldiers in Korea by designing
a proper pecuniary incentive. Based on soldiers’ preferences (supply) and the
demand of units, we calculate the optimal allocation and compensating wage differentials
using the Hungarian algorithm, a commonly used method for solving
linear programming problems. The calculated outcome of the optimal allocation
and compensating wage differentials achieves Pareto efficiency, which maximizes
the sum of utility from military service while minimizing wage expenditure.
In addition, the presented compensatory wage differentials are marketclearing
prices based on a general equilibrium approach, which is flexible and
responds to the demand and supply of the military internal labor market.


Robust Double Auction Mechanisms, Pages 36–49

Kiho Yoon

Abstract | PDF (156 kilobytes)

We study the robust double auction mechanisms, that is, the double
auction mechanisms that satisfy dominant strategy incentive compatibility, expost
individual rationality and ex-post budget balance. We first establish that the
price in any robust mechanism does not depend on the valuations of the trading
players. We next establish that, with a non-bossiness assumption, the price in any
robust mechanism does not depend on players’ valuations at all, whether trading
or non-trading. Our main result is the characterization result that, with a nonbossy
assumption along with other assumptions on the properties of the mechanism,
the generalized posted mechanism in which a constant price is posted for
each possible set of traders is the only robust double auction mechanism.


Platform Competition in Two-sided Markets and Welfare Implications, Pages 50–85

Wonki Jo Cho

Abstract | PDF (655 kilobytes)

We study the behavior of competing platforms in a two-sided market.
A user derives two types of utility from joining a platform: the intrinsic
membership benefit, which varies across users, and the network benefit, which
is determined by the number (measure) of users from the other side joining the
same platform. When multiple platforms compete in price to attract users, in
each symmetric equilibrium, each platform earns a zero profit. We also construct
the unique equilibrium in the case of platform monopoly. Our comparison
of welfare levels attained in oligopoly and monopoly shows that when there are
at least two platforms in the market, social welfare decreases as the number of
platforms increases; and that social welfare is maximized when two platforms or
a single platform operates, depending on the magnitudes of network externality
and marginal cost.


Long-term Predictors of Cardiovascular Disease: A Machine Learning Approach, Pages 86–114

Young-Joo Kim

Abstract | PDF (170 kilobytes)

This study investigates long-term cardiovascular disease (CVD) risk
predictors for middle-aged and older adults in Korea. Using the Least Absolute
Shrinkage and Selection Operator (Lasso) and the double-selection Lasso, this
study provides novel evidence that Body Mass Index (BMI) is a single risk factor
with long-term predictability for CVD odds ratio, selected apart from age, which
is non-modifiable. The lasting effect of BMI on CVD risk remains robust and
consistent across different methods and specifications that account for variable
selection errors in high-dimensional logit regression and BMI’s time trends. In
addition to the long-term predictive role of BMI in CVD risk, the disease burden
associated with increased BMI is quantified by comparing the marginal effects of
BMI to those of age across various groups. The marginal effect of elevated BMI
is more pronounced in men than women and among the employed compared
to the non-employed. Leading a healthy lifestyle through the control of BMI
is a critical element for preventing CVD based on the empirical findings of the
current study.


Non-Markovian Regime-Switching Models, Pages 115–148

Chang-Jin Kim, Jaeho Kim

Abstract | PDF (589 kilobytes)

To date, almost all extensions and applications of Hamilton’s (1989)
regime switching model have been based on the assumption that the latent regimeindicator
variable follows a Markovian switching process. This paper doubts the
universal validity of this assumption and develops an MCMC algorithm for estimation
of the non-Markovian regime switching model which employs an autoregressive
continuous latent variable in specifying the dynamics of the discrete
latent regime-indicator variable within the Probit specification. We show that, in
spite of the non-Markovian nature of the discrete regime indicator variable, the
Markovian property of this continuous latent variable allows us to successfully
estimate the model. Our empirical results suggest that, for modeling volatility of
the stock return, the non-Markovian switching model is strongly preferred to the
Markovian switching model. However, for modeling the regime-switching nature
of the business cycle based on real GDP, the convention of assuming Markovian
switching seems to be valid.

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