ชั้น 2 ธนาคารแห่งประเทศไทย
Targeting Credit through Community Members
Delegating the allocation of public resources to community members is an increasingly popular form of delivering development programs and are associated with a tradeoff between improved information about potential beneficiaries and favoritism towards local elites. Unlike targeting cash transfers to the poor, the optimal targeting of credit is a more complex problem involving issues of productivity, repayment, and market responses: This paper analyzes this problem using a large-scale lending program, the Thai Million Baht Credit Fund, which decentralizes the allocation of loans to an elected group of community members, and provides three main results. First, exploiting a long and detailed panel, I recover pre-program structural estimates of household total factor productivity and find that resources from the program were not allocated to high-productivity, poor households, which is inconsistent with poverty and productive efficiency as targeting criteria. Second, using socioeconomic networks data, I show that actual targeting is strongly driven by connections to village elites and is related to lower program profitability, which suggests favoritism as a reason for mistargeting. Finally, I exploit quasi-experimental variation in the rollout of the program and uncover evidence that, in general equilibrium, informal credit markets compensate for targeting distortions by redirecting credit towards unconnected households, albeit at higher interest rates than those provided by the program. The results highlight the limitations of community-driven approaches to program delivery and the role of markets in attenuating potential targeting errors.
The Impact of Cash Transfers on Child Outcomes in Rural Thailand: Evidence from a Social Pension Reform
Unlike standard literature on the social pension policy and children’s outcomes, this paper provides evidence from Thailand that an introduction of small (equivalent to 2-3 days of minimum wage) but universally covered social pension can affect educational choice and work status of children living with eligible pensioners. Such a result seems to be driven by the characteristics of newly eligible pensioners who are not as poor as the pensioners under the targeted program before the reform. Our findings also show differential effects of the social pension by genders of the children and pensioners. In particular, teenage boys living with male pensioners are more likely to enroll in the secondary school compared to children in the control group living with almost eligible seniors, while the results for teenage girls are rather inconclusive.
Minimum Wage and Lives of the Poor: Evidence from Thailand
Studying how the poor respond to the minimum wage policy in Thailand, I find that a notable increase in the minimum wage has no significant impact on employment among the poor even though wage plays a vital but heterogeneous role in determining employment. Also, this policy can significantly boost expenditure among the poor residing in provinces where the minimum wage is adjusted dramatically. Surprisingly, food does not account for the largest share of consumption as the income of the poor rises. The results are still robust to additional controls and redefinition of the poverty.
Farmers and Pixels: Toward Sustainable Agricultural Finance with Space Technology
This paper explores promises of satellite technology in creating high-quality agricultural risk information necessary for unlocking market inefficiencies that have precluded sustainable development of insurance markets and overall risk management in agricultural sector, where uninsured risk remains a leading impediment of economic development. Using pixel-level, high resolution, high frequency and longitudinal satellite data together with a combination of geographical information system (GIS) data, administrative and household-level agricultural data, this paper answers three questions: (1) Can satellite data be used to generate high-quality risk information for Thai rice farmers? (2) How might the satellite-based risk information be used to crowd in sustainable markets for agricultural finance? And (3) What are potential economic impacts of having high quality agricultural data on farmers, agricultural banks and government? After illuminating the potential values of investing in high-quality agricultural data, this paper also discusses key challenges and ways forward in bringing this research into real action to enhance financial stability of farmers, financial system and government.
Distributional Effects of Monetary Policy on Housing Bubbles: Some Evidence
Empirical asset pricing has always considered housing only as an investment good. This paper explores empirically the effect of monetary policy on housing bubbles when there exists a duality in housing markets: invest (own) vs. consume (rent). Using both simple and time-varying structural vector autoregression (SVAR and TVC-SVAR) with the U.S. housing market data between 1983-2017, this paper studies monetary transmission separately in the homeowners’ market and the renters’ market. Major findings are: (i) house price is sticky in that it takes more than 2.5 years for the full impact of monetary policy to occur; (ii) there is heterogeneity in the two housing markets: house price dynamic is more consistent with its fundamental in the renters’ market rather than in the homeowners’ market. This suggests that the two markets differ in their vulnerability to housing bubbles. (iii) monetary policy can play a useful role in stabilizing housing bubbles. Results are robust to alternative identifications of monetary policy shock.
Uncovering Productivity Puzzles in Thailand: Lessons from Microdata
The Asian financial crisis in 1997 has an impact on Thailand’s productivity both in the short run and in the long run. The post-crisis productivity growth rate dropped to merely 1% per year in comparison to the pre-crisis level at 2% per year. Thus, a better understanding about the factors determining Thailand’s aggregate productivity is a key to raising Thailand’s output in the long run. Recent literature has identified resource misallocation as an important factor to explain the difference in the productivity levels between developed and developing economies. This paper uses the plant-level data to estimate the allocative efficiency and to identify the source of resource misallocation in the Thai manufacturing sector. The results suggest that the size-dependent policies could contribute to the factor misallocation and that market concentration, foreign investment, and financial deepening could help alleviate the misallocation problem at the sector level. However, R&D activities intensifies resource misallocation that calls for well-defined policies to promote knowledge spillover within industry and to reduce the frontier-laggard gap. Dynamic resource reallocation helps shore up TFP growth over the business cycle that emphasizing a set of policy to reinforce the mechanism of creative destruction.
Structural Transformation in Thailand: A Perspective Through Product Innovation
This paper examines Thailand’s economic development through the perspective of structural transformation. Building on the insight that the products that a country exports tells much about the country’s underlying capabilities, we study Thailand’s evolving product structure both at the aggregate country level as well as at the firm level. We show that over the last 30 years, the diversification of Thailand’s product structure has been impressive, with important footholds being established in many well-connected and increasingly sophisticated products. This positive overall picture, however, masks potentially serious distributional problems. The number of firms and the number of provinces that are actively engaged in and contributing materially to Thailand’s product upgrading are highly concentrated. This may be limiting the gains to the economy more broadly. We confirm the importance of existing product structures at the country, regional, and firm levels for the evolution of firms’ product structure over time. That is, the current basket of goods produced by firms, regions, and the country affect firms’ decision over which products to introduce and which ones to drop. This path-dependent nature of product innovation has important implications for policy.
Overoptimistic Entrepreneurs: Predicting Wellbeing Consequences of Self-Employment
The formation of expectations is a fundamental part of the process when people decide about engaging in an entrepreneurial venture. We evaluate the accuracy of newly self-employed people’s predictions of their overall future wellbeing. Based on individual panel data for Germany, we find that they are overly optimistic when we compare their predicted life satisfaction with their actual life satisfaction five years later on. This overoptimism also holds for those entrepreneurs who successfully remain in business for at least five years. A possible reason might be that they underestimate the heavy workload reflected in higher working hours than desired and the drop in leisure satisfaction.
Predicting the Present Revisited: The Case of Thailand
Google is currently the most-used search engine in the world. There are approximately 3.5 billion searches being conducted on Google each day. With real-time processing, Google Trends data can be used in a prediction technique called nowcasting (or “predicting the present”) – using the current period’s real-time information to estimate the current period’s indicators of interest. In this paper, we showed how Google Trends can be used for nowcasting Thailand’s various economic indicators. The sectors being analyzed are (i) the labor market sector (unemployment rate and unemployment registration), (ii) the real sector (automobile sales), and (iii) the financial sector (SET index). The results revealed that incorporating the Google Trends data into the prediction models improved the Adjusted R-Squared and improved the predication accuracies under various measures.
The Impact of Immigration on Wages, Internal Migration and Welfare
This paper studies the impact of immigration on wages, internal migration and welfare. Using U.S. Census data, I estimate a spatial equilibrium model where labor differs by skill level, gender and nativity. Workers are heterogeneous in city preferences. Cities vary in productivity levels, housing prices and amenities. I use the estimated model to assess the distributional consequences of several immigration policies. The results show that a skill selective immigration policy leads to welfare gains for low skill workers, but welfare losses for high skill workers. The negative impacts are more substantial among the incumbent high skill immigrants. Internal migration mitigates the initial negative impacts, particularity in cities where high skill workers are relatively mobile. However, the negative impacts on some workers intensify. This is because an out-migration of workers of a given type may raise the local wages for workers of that type, while reducing the local wages of workers with complementary characteristics. Overall, there are substantial variations in the welfare effects of immigration across and within cities. Further, I also use the model to assess a non-selective immigration policy and deportation of unauthorized immigrants in specific areas.