Household economic prudence in Thailand

Arbeitspapier

The countercyclical pattern of saving in Thailand in the 1990s and 2000s challenged the prediction of permanent income theory and raised questions about household saving behaviors in the country. Using constructed pseudo-panel data sets from the Thai Household Socioeconomic Surveys from 1992 to 2011, this paper estimates the intensity of the precautionary saving motive, measured by the coefficient of relative prudence of households in Thailand. By using a dynamic pseudo-panel approach to address concerns with regard to individual heterogeneity causing bias in estimation, the estimated relative prudence of Thai households is around 2, which shows a low precautionary saving motive among these households compared to other countries. Estimates based on disaggregation by demographic characteristics show that as a result of the government-assistance policy, older cohorts and those who live in the rural areas show lower prudence. However, female heads of households and those with a high education level exhibit high prudence, indicating the high income uncertainty faced by these groups in the economy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ADBI Working Paper Series ; No. 1104

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Household Saving; Personal Finance ; Consumer Economics: Empirical Analysis
• Subject: precautionary saving ; prudence ; dynamic pseudo-panel ; Thailand

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sasiwimon Warunsiri Paweenawat
• Event: Veröffentlichung
• (who): Asian Development Bank Institute (ADBI)
• (where): Tokyo
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/238461
• Last update: 10.03.2025, 11:42 AM CET