Research Economist, Federal Reserve Bank of New York
Ph.D. in Economics, New York University, 2024
Emaabcil: lee.eungik@abcgmabcailabc.com
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Federal Reserve Bank of New York or the Federal Reserve System.
Working Papers
The Discouraged Refinancer: Perceived Credit Access and Mortgage Refinancing
with Josefina Cenzon, Wilbert van der Klaauw
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Abstract
Many mortgage borrowers do not refinance despite the potential for substantial savings. Using the New York Fed's Survey of Consumer Expectations, we assess the role of approval concerns by comparing borrowers' stated probabilities of applying to refinance under current conditions and under guaranteed approval. We combine these responses with confidential HMDA to construct borrower-specific benchmarks for refinancing rates and approval probabilities. First, we document a sizable discouragement wedge between the two probabilities: guaranteed approval nearly doubles the average probability of applying. Second, application probabilities respond about 40 percent less to better refinancing terms under current conditions than under guaranteed approval. This difference is largest among borrowers who believe they cannot qualify for refinance. Third, the discouragement wedge is larger among borrowers whose approval beliefs are more pessimistic than the HMDA-based benchmark, but it persists even among borrowers whose beliefs are close to the benchmark. These findings suggest that previous research using refinance application records may overlook selection on approval concerns. These concerns also weaken the transmission of lower rates to households. Releasing this hidden refinancing demand may require both better information about approval prospects and improved access to credit.
When Irrelevant Options Matter: Redundancy, Noisy Cognition, and Portfolio Choice
with Syngjoo Choi, Uihyeon Jung
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Abstract
Adding options that expand no opportunity should not change behavior. We test this by introducing redundant assets, securities replicable from those already available, into a laboratory portfolio problem with an unchanged budget set. In a model of noisy cognition, redundancy spreads a fixed cognitive capacity over more operations, so the decision maker reads relative prices less precisely and shrinks demand toward her prior. Redundancy reduces price responsiveness by 18 percent even when payoff arithmetic is automated; cognitive uncertainty best predicts who attenuates; and observing the choices of unattenuated participants cuts attenuation by 60 to 73 percent, mainly among high-uncertainty subjects.
Does Generative AI Crowd Out Human Creators? Evidence from Pixiv
with Sueyoul Kim, Ginger Jin
R&R at Management Science
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Abstract
Using a comprehensive dataset of posts from a major platform for anime- and manga-style artwork, we study the impact of the launch of a prominent text-to-image generative AI.
Focusing on the majority of incumbent creators who do not adopt AI as a primary tool, we show that the AI launch led to a significant decline in post uploads by illustrators, whereas comic artists were less affected, reflecting the need for tight stylistic alignment across sequential images in comics.
We present empirical evidence for two underlying mechanisms.
First, illustration posts experience a loss of viewer attention, measured by bookmarks, following the AI launch, which can significantly harm creators’ business models.
Second, direct competition from AI-generated content plays an important role: illustrators working on intellectual properties (IPs, such as Pokémon) that are more heavily invaded by AI reduce their uploads disproportionately more.
We further examine creators’ responses and show that illustrators with greater exposure to AI avoid using tags favored by AI-generated content after the AI launch and broaden the range of IPs they work on, consistent with a risk-hedging response to AI invasion.
Earnings Shocks, Expectations, and Spending
with Johan Sæverud
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Abstract
The impact of earnings shocks on workers' earnings expectations is a key determinant of subsequent consumption changes.
Using a unique combination of an expectations panel survey and administrative data from Denmark, we identify earnings shocks, expectation changes, and consumption changes that are often challenging to observe.
Simultaneously, prevailing assumptions in the income process literature, including perfect differentiation of permanent and transitory shocks, have limitations in explaining the empirical expectation changes upon earnings shocks.
We introduce a new income process model in which workers possess partial information about the nature of earnings shocks.
Our estimates show that workers distinguish only half of permanent and transitory shocks.
We further investigate the implications of partial information on consumption changes both empirically and through the lens of a model.
We find that workers' partial information about the earnings shocks is important to match the degree of consumption response upon earnings shocks.
Moreover, we show that partial information better predicts the consumption insurance level observed in empirical literature than other conventional assumptions.
Communicating Social Security Reform
with Andrew Caplin, Soren Leth-Petersen, Johan Sæverud
R&R at Journal of Economic Behavior and Organization
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Abstract
Despite its centrality in monetary policy, communication is not a focus in social security reform. We investigate the potential for active communication to dissipate apparently widespread public confusion about the future of social security. We implement a simple information treatment in which we randomly provide survey respondents access to the longevity-based eligibility age implemented by reform that Denmark launched in 2006. Absent treatment, younger workers not only have biased beliefs, expecting to become eligible for social security earlier than policy makers intend, but also are highly uncertain about eligibility age. The information treatment eliminates the bias, suggesting it results from misunderstanding. Yet it has no influence on uncertainty, suggesting this is driven by unavoidable demographic and political uncertainties. Our results highlight the value of communication strategies and belief measurement as policy instruments outside the monetary policy arena.
Teaching Practices, Prosocial Giving, and Friendship Networks
with Syngjoo Choi, Booyuel Kim, Euncheol Shin, Yoonsoo Park
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Abstract
We investigate the effects of a semester-long student-centered teaching program on prosocial giving and network homophily by conducting pre- and post-intervention friendship surveys and dictator game experiments. Using a difference-in-differences method, we show that the intervention promotes prosocial giving to indirectly connected peer students, strengthens class and gender homophily in friendship, and reduces average distance among indirectly connected students. By structurally estimating a network formation model, we infer that the program also reduces costs of making friends of both genders in the same class. Our findings offer novel micro-level insights on the connection between teaching practices and social capital and networks.
Publications
Worker Preparedness Across the Marshallian Runs
:Survey Instruments and Early Evidence from the Copenhagen Life Panel
with Andrew Caplin, Ida Hartmann, Victoria Gregory, Soren Leth-Petersen, Johan Sæverud
Econometric Society Conference Volume (2026)
Subjective Earnings Risk
with Andrew Caplin, Victoria Gregory, Soren Leth-Petersen, Johan Sæverud
Review of Economic Studies (2026)
The Resolution of Uncertainty in the Value and Probability Domains
with Kathleen Ngangoue, Andrew Schotter
Games and Economic Behavior (2026)
North Korean Refugees' Implicit Bias against South Korea Predicts Market Earnings
with Syngjoo Choi, Byung-Yeon Kim, Jungmin Lee, Simon Lee
Journal of Development Economics (2024)
Irreversibility and Monitoring in Dynamic Games:
Experimental Evidence
with Bongjune Choi, Syngjoo Choi, Yves Gueron
International Economic Review (2023), *first author
Probability Weighting and Cognitive Ability
with Syngjoo Choi, Jeongbin Kim, Jungmin Lee
Management Science (2022)
Higher Order Risk Attitudes and Prevention under Different Timings of Loss
with Takehito Masuda
Experimental Economics (2019)