สถาบันวิจัยเศรษฐกิจป๋วย อึ๊งภากรณ์

ผลงานวิจัยฉบับเต็มโดยนักวิจัยของสถาบันและนักวิชาการภายนอก

THE IMPACT OF REGIONAL ISOLATIONISM: DISENTANGLING REAL AND FINANCIAL FACTORS

 

No. 49
30 พฤศจิกายน 2559

The Social Cost of Thailand’s Transportation Fuel Pricing Policy

abstract

The price structure of Thailand’s transportation fuels has always been heavily distorted by the government. The prices of diesel and biofuels are consistently subsidized, while the prices of other fuels are raised above their competitive level in order to provide cross-subsidies to diesel and biofuels. Price distortion in this fashion leads to over- /under-consumption of transportation fuels relative to the socially optimal level. This study estimates the economic and social cost of the price distortions within Thailand’s transportation fuel market that stem from inecient price structure and cross subsidies.

No. 48
16 พฤศจิกายน 2559

The Impacts of the Billing System on Healthcare Utilization: The Case of Thai Civil Servant Medical Benefit Scheme

abstract

While a large number of health insurance studies find that an increase in cost-sharing reduces healthcare demand, little has looked at the effect of a policy change operating through a non-price channel. This paper examines how a billing process can affect healthcare utilization given no change in price. Specifically, we look at the launch of the Direct Billing Payment program (DBP) to the Thai Civil Servant Medical Benefit Scheme. In the past, although the outpatient care is essentially free, its beneficiaries must pay at the point of services and get their money reimbursed later. The DBP allows the hospitals to charge the government directly. Using patient-level panel data from a large regional hospital, we find that the new billing system affects utilization through multiple channels. First, it increases the number of outpatient visits. Second, for each visit, the treatment costs and the share of prescription drug charge are higher. These impacts are found to be persistent over time, although less so in the case of visits. In addition, our analysis suggests that the likely cash constrained patients increase their utilization more proportionally.

No. 47
2 พฤศจิกายน 2559

Optimal Environmental Policies and Renewable Energy Investment in Electricity Markets

abstract

Renewable electricity subsidies have been popular policy instruments to combat climate change because of their ability to offset emissions. This paper studies the long-run welfare benefits of optimizing the design of the existing renewable energy subsidy (the status quo) in the presence of heterogeneity in the offset emissions. In particular, I measure the welfare gain from differentiating renewable subsidies across location and time to reflect the environmental benefits from offseting emissions. I find that the welfare gain from differentiation is small compared to the gain already achieved under the status quo subsidy. In contrast, the optimal emissions tax yields much larger welfare gain because it engages in other cost-effective emissions abatement channels that renewable energy subsidies do not: namely, demand conservation and cross-plant fuel substitution.

No. 46
19 ตุลาคม 2559

Value Investing: Circle of Competence in the Thai Insurance Industry

abstract

This study explores the strategy of value investing, specifically for the insurance industry in Thailand. It employs multiple measures of “value,” suitable for insurance companies, such as the price-to-earning (PE), price-to-book (PB), and cyclically adjusted price-to-earnings (CAPE). Value premium exists in the Thai insurance industry. Most of the value portfolios constructed from these measures significantly outperform the market, even when adjusting for price volatility and portfolio’s ß . The cumulative returns are also higher for the value stocks, when compared to the growth stocks, and the Thai stock market. Constructing a value portfolio, using the PE ratio, results in the highest returns and are far better than PB and CAPE. The value anomaly cannot be fully explained by either the capital asset pricing model or the Fama-French 3 factor models.

No. 45
5 ตุลาคม 2559

The Economic Impacts of Extreme Rainfall Events on Farming Households: Evidence from Thailand

Sirikarn Lertamphainont and Robert Sparrow

abstract

We investigate how rainfall shocks, in terms of floods and droughts, affect income, consumption, and coping responses of farming households in Thailand. We draw on a province pseudo-panel, combining household-level information from repeated cross-sectional farm household surveys over the period of 2006-2010 and provincial-based measures of annual rainfall shocks. These rainfall shock variables are constructed from high frequency rainfall time series, identifying the incidence of excessive and deficit rainfall events. We find that crop income falls sharply as a results of rainfall shocks, while there is evidence of income smoothing through asset transactions and off-farm employment in response to excessive rainfall but not deficit rainfall. This suggests that deficit rainfall events are more difficult to insure against as droughts not only reduce crop income but also limit households’ opportunities to smooth income. On average, households seem to be able to smooth their consumption when affected by floods or droughts, although we do see a reduction in spending on luxury and miscellaneous items in case of droughts in order to maintain necessary consumption. Dissaving and asset sales are prevalent strategies for consumption smoothing. Finally, our findings emphasise wealth-differentiated effects of rainfall shocks as landless households seem more vulnerable to rainfall shocks than landholding households due to their limited ability to smooth income and consumption.

No. 44
21 กันยายน 2559

Trade, Wage Premia and Labor Shortages

abstract

Recent trade theories with heterogeneous firms build upon labor market frictions and search to generate rent sharing between firms and their employees and workforce adjustments following trade liberalization. However, little empirical attention has been paid to potential labor shortages. Using firm-level vacancy data from Thailand’s manufacturing sector for 2003-2006, I construct the ratios of vacancies to employment to measure the extent of labor shortages across firms. I find that a cut in input tariffs raises not only wages at firms that use imported intermediates, but also their vacancies to employment ratios relative to firms that only source inputs locally. Importantly, firms with high vacancies to employment ratios pay higher wages, and even more so for importers of intermediate inputs. This evidence is consistent with the hypothesis that labor shortages constitute one empirically documentable mechanism by which importing firms pay higher wages: they search more intensively for workers, suffer more from hiring constraints, and hence increase their wage offers to raise adequately skilled employment following input tariff cuts.

No. 43
7 กันยายน 2559

Dissecting Thailand’s International Trade: Evidence from 88 Million Export and Import Entries

abstract

With a trade-to-GDP ratio of over 130 percent, Thailand is one of the most open emerging market economies in the world. Through a transactional-level database of over 88 million customs entries, this paper provides a comprehensive picture of the dynamic evolution of Thai international trade, highlighting both the intensive as well as extensive margins. Focusing on exports and exporting firms, we document the highly concentrated, specialized and fragile nature of export activity.

No. 42
17 สิงหาคม 2559

Firm-level Perspective of Thailand’s Low Investment Puzzle

abstract

Private investment in Thailand has been standing at a low level since the aftermath of the Asian Financial Crisis until present. Using firm-level data of virtually all registered firms in Thailand during 2001-2013, this paper finds that more than 60 percent of Thai firms have been undertaken negative net investment (invested at a rate slower than the depreciation rate) each year. Our regression results suggest that small firms and large firms have been facing different kinds of obstacles that ultimately led to persistently low investment at the aggregate level. For large firms, low or negative net investments are driven mainly by weak growth prospects and future uncertainties. For small firms, their investments are more likely hindered by supply-side constraints (lack of access to external finance) and negative net investments are driven mainly by inefficiency.

No. 41
11 สิงหาคม 2559

From Many to One: Minimum Wage Effects in Thailand

Dilaka Lathapipat and Cecilia Poggi

abstract

This article examines the effects of changing the minimum wage policy structure in Thailand, from multilevel wages set geographically to a single statutory minimum. It exploits the recent hike in the minimum wage to evaluate the effects on employment and wage distribution. We find that employment is weakly affected, with reductions in youth unskilled employment and localised downward adjustments for SMEs. Furthermore, wage distribution seems to have improved. Using an application of the Recentered Influence Function applied to provincial wage distributions, we show that wages are affected up to the 60th percentile, suggesting that minimum wage levels serve as numeraire for wage renegotiation in a Middle Income country context. The hike in the minimum has benefited workers in the 15-45th percentiles, with no discernible effects in the lowest quantiles which appear to be driven by non-compliance among microenterprises.

No. 40
10 สิงหาคม 2559

Floods and Farmers: Evidence from the Field in Thailand

Sommarat Chantarat, Sirikarn Lertamphainont and Krislert Samphantharak

abstract

This paper studies the impacts of the 2011 flood on preferences, subjective expectations, and behavioral choices among Thai rice-farming households. Our results show that experiencing the 2011 flood made farming households more risk averse, more impatient, and more altruistic, and that asset-poor farming households were more likely to be affected by the flood than better-off households. The flood also made households adjust upward their subjective expectations of future severe floods. After being hit by the 2011 flood, households lost their confidence in social safety nets, signifying the limitations of risk-sharing in the presence of covariate shocks. Middle-income households who were not prone to floods had higher expectations of public insurance following the flood. Mediating through the changes of preferences and subjective expectations, the flooded households were less likely to save money and engage in self-insurance mechanisms, as well as to invest in productive investments, but more likely to take out commercial crop insurance, especially those in the bottom and middle wealth groups. These findings shed light on the design of incentivecompatible safety nets and development interventions.

No. 39
3 สิงหาคม 2559

Drivers of Financial Integration: Implications for Asia

Nasha Ananchotikul, Shi Piao and Edda Zoli

abstract

Deeper intraregional financial integration is prominent on Asian policymakers’ agenda. This paper takes stock of Asia’s progress toward that objective, analyzing recent trends in cross-border portfolio investment and bank claims. Then, it investigates the drivers of financial integration by estimating a gravity model of bilateral financial asset holdings on a large sample of source and destination countries worldwide, focusing in particular on the role of regulation and institutions. The paper concludes that financial integration in Asia could be enhanced through policies that lower informational frictions, continue to buttress trade integration and capital market development, remove restrictions to foreign flows and bank penetration, and promote a common regulatory framework.

No. 38
27 กรกฎาคม 2559

Natural Disasters, Preferences, and Behaviors: Evidence from the 2011 Mega Flood in Cambodia

Sommarat Chantarat, Sothea Oum, Krislert Samphantharak and Vathana Sann

abstract

This paper studies the impacts of the 2011 mega flood on preferences, subjective expectations, and behavioral choices among Cambodian rice-farming households. We find flood victims to have larger risk aversion and altruism, and lower impatience and trust of friends and local governments. The disaster also induced flooded households to adjust upward their subjective expectations of future floods and of natural resources as a safety net. Mediating (partially if not all) through these changes in preferences and expectations, the 2011 flood also affected households’ behavioral choices, some of which could further result in long-term economic development and resilience to future floods. We find flooded households to have lower productive investment, to substitute away social insurance by increasing self-insurance and demand for market-based instruments, and more importantly, to increase the use of natural resources as insurance. These findings shed light on the design of incentive-compatible safety nets and development interventions.

No. 37
20 กรกฎาคม 2559

Monetary Policy, Bank Lending and Corporate Investment

Chaiporn Vithessonthi, Markus Schwaninger and Matthias O. Müller

abstract

The purpose of this study is to shed light on the chain of causality from macroeconomic financial policy to the microeconomic investment function. Concretely, we aim to provide an in-depth analysis of the relationships between the monetary policy of central banks, the loan policy of commercial banks, and the investment behavior of firms. We focus on countries that conduct their monetary policy under the inflation-targeting framework. Our empirical analysis with data from Germany, Switzerland and Thailand provides several new insights. First, after controlling for the US monetary policy, the monetary policy in Germany and Thailand appears to influence the banks’ lending rate in the short run (i.e. within two months), whereas the monetary policy in Switzerland seems to be ineffective at influencing the banks’ lending rate in the short run. Second, our results show that the banks’ lending rate has a negative effect on their loans and that this negative effect is weakened by their growth opportunities. Third, we find that the supply of bank loans plays a more pivotal role in determining firms’ investment than the lending rate. Last but not least, we document that neither the lending rate nor the loan-to-assets ratio moderates the sensitivity of the firms’ investment to growth opportunities.

No. 36
13 กรกฎาคม 2559

Portfolio Flows, Global Risk Aversion and Asset Prices in Emerging Markets

Nasha Ananchotikul and Longmei Zhang

abstract

In recent years, portfolio flows to emerging markets (EMs) have become increasingly large and volatile. Using weekly portfolio fund flows data, the paper finds that their short-run dynamics are driven mostly by global “push” factors. To what extent do these cross-border flows and global risk aversion drive asset volatility in EMs? We use a Dynamic Conditional Correlation (DCC) Multivariate GARCH framework to estimate the impact of portfolio flows and the VIX index on three asset prices, namely equity returns, bond yields and exchange rates, in 17 emerging economies. The analysis shows that global risk aversion has a significant impact on the volatility of asset prices, while the magnitude of that impact correlates with country characteristics, including financial openness, the exchange rate regime, as well as macroeconomic fundamentals such as inflation and the current account balance. In line with earlier literature, portfolio flows to EMs are also found to affect the level of asset prices, as was the case in particular during the global financial crisis.

No. 35
6 กรกฎาคม 2559

Mortality Risk and Human Capital Investment: The Legacy of Landmines in Cambodia

abstract

Life expectancy plays a key role in determining households’ optimal investment in children’s human capital accumulation. This paper examines this relationship by looking at a unique case of Cambodia and the nation’s prevalence of landmines. Extensive usage of landmines during its long civil conflict since the 1970s was followed by large international effort of landmine clearance operation. A two-fold increase in landmine clearance effort during the periods 2004-2005 in affected areas, has led to a subsequent sharp fall in landmine casualty rates. Together with the male-biased characteristic of landmine accidents, all three variations allow us to estimate the impact of working-age mortality risk on skill formation using a difference-in-difference-in-difference model. To deal with the unobservable, landmine casualty rates are also instrumented by the stock of dangerous land in neighbouring areas. We find a strong negative effect of landmine mortality on both schooling and health investment outcomes. When the mortality risk from such a fearful event as landmine accidents is replaced by a more common incident of traffic accidents, any mortality effect on schooling outcomes is no longer detected. This is evidence of a role played by subjective life expectation in optimal decision making on the households.