Yenjae Chang

Temporary fuel-tax cuts are meant to cushion oil-price spikes, but their reversals determine whether relief creates a firm-favorable ratchet. We study Korea, where registered stations post tax-exempt prices for the same gasoline and diesel sold to certified agricultural and fishery users. In the full OPINET price-disclosure panel, these exempt prices provide a contemporaneous within-product control for common cost shocks; exact within-station matches provide a stricter validation sample concentrated in rural, less competitive markets. Across two cuts and two restorations directly estimated from 2018 to 2021, impact pass-through is incomplete, about 0.55 on the value-added-tax-inclusive posted-price benchmark, and rises over subsequent weeks. Nationally, cuts and increases pass through at comparable rates, clean-event comparisons are consumer-favorable, and sensitivity analysis rules out a firm-favorable asymmetry as large as those documented for value-added tax changes. Market structure affects the level, not the direction, of pass-through: thinner markets pass through less, but the competition gradient is similar for cuts and restorations. Applying preferred full-sample estimates to the 2018-2022 value-added-tax-inclusive fiscal base implies that about 39% of KRW 9.74 trillion did not reach consumers; the share rises to about 47% in the exact matched low-competition scenario. Temporary fuel-tax cycles therefore do not create a large hidden ratchet to firms, but tax cuts remain materially and spatially leaky relative to targeted transfers.

Temporary fuel-tax cuts are meant to cushion oil-price spikes, but their reversals determine whether relief creates a firm-favorable ratchet. We study Korea, where registered stations post tax-exempt prices for the same gasoline and diesel sold to certified agricultural and fishery users. In the full OPINET price-disclosure panel, these exempt prices provide a contemporaneous within-product control for common cost shocks; exact within-station matches provide a stricter validation sample concentrated in rural, less competitive markets. Across two cuts and two restorations directly estimated from 2018 to 2021, impact pass-through is incomplete, about 0.55 on the value-added-tax-inclusive posted-price benchmark, and rises over subsequent weeks. Nationally, cuts and increases pass through at comparable rates, clean-event comparisons are consumer-favorable, and sensitivity analysis rules out a firm-favorable asymmetry as large as those documented for value-added tax changes. Market structure affects the level, not the direction, of pass-through: thinner markets pass through less, but the competition gradient is similar for cuts and restorations. Applying preferred full-sample estimates to the 2018-2022 value-added-tax-inclusive fiscal base implies that about 39% of KRW 9.74 trillion did not reach consumers; the share rises to about 47% in the exact matched low-competition scenario. Temporary fuel-tax cycles therefore do not create a large hidden ratchet to firms, but tax cuts remain materially and spatially leaky relative to targeted transfers.

The spatial distribution of solar photovoltaic (PV) deployment has become increasingly important for the cost-efficient expansion of renewable energy. In South Korea, solar PV installations are highly concentrated in specific regions, raising concerns about grid congestion and the mismatch between electricity generation and demand. This study examines the determinants of solar PV location choices and evaluates how regulatory constraints, grid infrastructure, and locational price incentives affect both the spatial distribution and cost efficiency of solar deployment. Using project-level data on solar PV installations constructed between 2020 and 2021, we estimate a conditional logit model of developers’ location choices across municipalities. The model demonstrates strong predictive performance, which provides a basis for conducting simulations under counterfactual policy scenarios. The simulation results indicate that relaxing setback regulations and expanding grid infrastructure promote deployment in low-cost regions, thereby improving cost efficiency. In contrast, locational price incentives induce modest changes in location preferences but increase deployment costs by shifting installations toward higher-cost regions. When policy instruments are combined appropriately, they can promote a more balanced spatial distribution of solar PV deployment while simultaneously reducing overall deployment costs. These findings highlight a trade-off between cost efficiency and spatial alignment in renewable energy policy, underscoring the need for coordinated policy design.

Maintaining high facility reliability in power plants is essential to secure long-term electricity supply. This paper applies the survival analysis to the actual unit level power generation data in Korea to estimate the relationship between facility reliability and the preventive maintenance. Duration of generators between forced outages is used to measure plant reliability. the empirical analysis shows that preventive maintenance cost, planned outage for maintenance, use rate, and reserve margin lead to the longer duration of generators and, in turn, the lower forced outage rates. We uncover that the marginal benefit of the preventive maintenance cost is decreasing at an increasing rate. It indicates that the marginal benefit of the “current” maintenance cost is minimal. Results in the paper imply that power plants in Korea might be spending unnecessarily high maintenance costs considering already having world’s lowest forced outage rates.