Woongchan Jeon

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Job Market Paper

Pricing Externalities in the Presence of Adaptation [PDF]

I study optimal taxation in a general equilibrium model in which households compete against final goods producers for pollutant-emitting intermediate goods. For example, as the climate warms, households use more energy in the form of air conditioning. I show theoretically that an increase in market demand for such goods increases polluting firms' marginal profit. Firms respond by increasing their production, leading to higher pollution levels. To take these theoretical insights to reduced-form evidence, I construct a macroeconomic climate-economy model using heat-related discomfort and cooling loads as an example. In a calibrated economy, I find that the mortality social costs of carbon in 2020 are underestimated by about 7% if such feedback is not considered.

Works in Progress

Heterogeneity in the Spending Response to Stimulus: Evidence from the Pulse Survey (joint with Kieran J. Walsh)

Pricing Climate Risks: Evidence from Wildfires and Municipal Bonds (joint with Lint Barrage and Kieran J. Walsh)

The Distributional Impacts of Wildfires on Household Balance Sheets in the Western United States