1

INCURRING DEBT OF THAIS FAMER

HOUSEHOLDS REPORT 2011
NATIONAL STATISTIC ORGANIZATION
Presented by
PHONGTHON THUIPRASIT Department of Bio-Business studies, NODAI

Guideline
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Introduction
Basic data of Thailand
Summarized theory
Incurring debt of households situation
and Purpose of borrowing
Presenters viewpoint
References

Introduction
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In previous decade economic of Thailand have been

grown up continuously, that can see from the
amount of REAL GDP rate around 2000-2011. It was
about 4.5 percent per year by the averaging.
Follow the economic condition and households
social survey 2000-2011 that was show average
income of households is increased follow economic
condition. For CAGR of income about 6.1 percent
per year
However households expenditure also increases
too. and CAGR of expenditure about 5.3 percent per
year

*CAGR means Compound Annual Growth Rate.

Basic data of
Thailand

Basic geographical data of Thailand

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The National Research Council

divides Thailand into six
geographical regions, based
on natural features including
landforms and drainage, as
well
as
human
cultural
patterns. They are, namely:
the
North
Region,
the
Northeast Region, the Central
Region, the East Region, the
West Region and the South
Region of Thailand. (Wikipedia)

Summarized theory
about Incurring
Debt and
consumption
behavior

Absolute Income Hypothesis

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consumption is a stable function of cur

rent income (to be more specific, current
disposable incomeincome after tax
payment). - John Maynard Keynes (1883
1946)

is consumption at time t
is marginal propensity to consume ()
is income at time t

Relative Income Hypothesis

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Consumption of an individual is not the function of his absolute income but of his
relative position in the income distribution in a society, that is, his consumption
depends on his income relative to the incomes of other individuals in the society.

Duesenberry (James S.) 1959

Permanent Income theory of Consumption

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A person's consumption at a point in time is determined not just by their current

income but also by their expected income in future years- their Permanent income". In
its simplest form, the hypothesis states that changes in permanent income, rather than
changes in temporary income, are what drive the changes in a consumer's consumption
patterns. - Milton Friedman (1957)

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Life cycle theory of

consumption
Life-cycle hypothesis postulated by Albert
Ando and Franco Modigliani in 1963 tried to
explain the conflict between the APS observed
from cross-section date and that observed from
historical time-series data.
According to their hypothesis, a typical
individual have a flow of relatively low income at
the early stage and end of life, but high during the
middle of life. The individual does maintain a
slightly increasing level of consumption
throughout his life, and the present value of total
consumption would not exceed the present value
of total income during the lifetime.

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Life cycle theory of

consumption

Figure 1 Age for borrowing money from

https://research.stlouisfed.org/

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Incurring debt of
households situation and
Purpose of borrowing

Incurring debt of households situation

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Household Debt (2011)

More than half of households in the whole
country (55.8%) were indebted. The average
amount of debt was 134,900 baht per
household. The main purpose of borrowing was
for household spending (73.8%), which
consisted of household consumption (37.8%),
buying house/land (34.0%) and loan for
education (only 2.0%).
The share of debt for farming was found 4.1
percent higher than those for non-farm
business (14.4 and 10.3 percent respectively)

Incurring debt of households situation

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Figure 1 Percentage of Indebted Households and Percentage of

Average Amount of Debt per All Households by Purpose of
Borrowing (Bureau, 2012)

Incurring debt of households situation

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Figure 3 Percentage Distribution of Monthly Households

Expenditure by Type of Expenditure (Bureau, 2012)

Incurring debt of household's situation

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Administrative
district /Region

Year 2009

Year 2011

Number

Percenta
ge

Number

Percentag
e

4,401,381

100.00

4,380,58
1

100.00

305,964

7.0

364,172

8.3

4,095,417

93.7

4,016,40
9

91.7

Bangkok

7,793

0.2

2,585

0.1

Central

624,774

14.2

,591,179

13.5

1,243,515

28.3

1,176,98
2

26.9

Whole Kingdom
Municipal area
Non-Manucipal area
Region

North

Table 1 Number and percentage of Farmer households

1,881,566
42.7 region1,892,17
separated
by administrative
area and
(Bureau, 43.2
2011)
North-eastern
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Incurring debt of household's situation

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Table 2 Number of holders reporting amount of debt for agriculture by amount of debt and source of
loan (Group, 2013)

Incurring debt of household's situation

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Net average debt (BAHT)

Under
5,000

Percentag
e

5,00010,000

Amount of average debt of

households 2009
Proportion indebted households 2009

10,00115,000

15,001 and
over

Range of total
expenditure of
household

Amount of average debt of

households 2011
Proportion indebted households 2011

Figure 3 proportion indebted households and amount of average debt of

households by range of expenditure in 2009 and 2011 (Bureau, 2011)

Incurring debt of household's situation

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Range of total
income of
farmers
households

Total average
income
monthly of
household
(Baht)

Amount of
average debt
per farmers
households
(Baht)

Debt service
ratio
(times)

Total

19,837

140,404

7.1

Under 10,000
baht

6,822

67,238

9.9

10,001-20,000
baht

14,302

108,211

7.6

20,001-30,000
baht

24,236

177,265

7.3

30,001 and over

57,146

341,411

6.0

Table 3 total average monthly income per household, Amount of

average debt per farmers households and Debt service ratio by range
of total income of farmers household 2011 (Bureau, 2011)

Presenters viewpoint
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When we consider about ability to pay of farmers

household in 2009 and 2011 was found farmers
households have the ability to pay are better than
previous by the proportion of debt and income
about 7.8 times in 2009, 7.1 times in 2011.
For the group of high income households have
ability to pay are better then lower income
households. So that indicate to the group which
high risk to be heavily in debt is lower income
households. In the future that problem will impact
to economic stability of kingdom.

References
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Ando, A., & MoBureau, S. F. (2012). THE 2011 HOUSEHOLD

SOCIO - ECONOMIC SURVEY WHOLE KINGDOM. Bangkok:
National Statistical Office.
digliani, F. (1963). The "Life Cycle" Hypothesis of Saving:
Aggregate Implications and Tests. The American Economic
Review, 53(1), 55-84. Retrieved from
http://www.jstor.org/stable/1817129
Wikipedia. Geography of Thailand. Search when 2015 Nov
10th
Group, A. S. (2013). 2013 AGRICULTURAL CENSUS WHOLE
KINGDOM. Bangkok: Statistical Forecasting Bureau National
Statistical Office.

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Thank you for

your attention