Modelling Minimum Wage in Thailand: Applications Generalized Maximum Entropy Estimators for Panel Data Regression Models
Keywords:
Minimum Wage, Generalized Maximum Entropy Estimators, Panel Data, ThailandAbstract
This study aims to examine factors affecting wage determination at the provincial level in Thailand. Generalized Maximum Entropy estimator (GME) for panel data regression models was employed to analyze by using longitudinal data of 76 provinces over 10 years between 2006 and 2015 on minimum wages and other macroeconomic variables. Results indicate that cost of living and labor productivity have positive impacts on minimum wage rate, but unemployment, inflation, corporate income tax, and economic growth have a negative one. These finding may help to inform policymaker and all stakeholders in Thailand debate the better minimum wage rate adjustment.
References
Baltagi, B.H. (2005). Econometric analysis of panel data. (3rd ed.). West Sussex: John Wiley & Son.
Bersales, L.G.S., and Lucagbo, M.D.C. (2014). Determinants of Regional Minimum Wages in the Philippines. The Philippine Statistician Vol. 63, No. 2 (2014), pp. 71-85
Blais, A., Cousineau, J., & McRoberts, K. (1989). The determinants of minimum wage rates. Public Choice, 62,15–24.
Boonsripracha, C. (1996). The concurrence of Minimum Wage Fixing and Economic Conditions in Thailand. Master of Science Thesis (Economics), Major Field Economics, Department of Economics. Kasetsart University. (in Thai).
Button, K.S., Ioannidis, J.P., Mokrysz, C., Nosek, B.A., Flint, J., Robinson, E.S. and Munafò, M.R. (2013). Power failure: why small sample size undermines the reliability of neuroscience. Nature Reviews Neuroscience 14(5) 365-376
Chinnakum, W. and Boonyasana, P. (2017). Modeling Thailand Tourism Demand: A Dual Generalized Maximum Entropy Estimator for Panel Data Regression Models. Thai Journal of Mathematics: Special Issue on Entropy in Econometrics:67-78.
Ciavolino, E. and Al-Nasser, A. D. (2009). Comparing generalized maximum entropy and partial least squares methods for structural equation models. Journal of Nonparametric Statistics 21, 1017-1036.
Clark, T., and Linzer, D. (2015). Should I Use Fixed or Random Effects?. Political Science Research and Methods, 3(2), 399-408. doi:10.1017/psrm.2014.32
Corral, P. and Terbish, M. (2015). Generalized maximum entropy estimation of discrete choice models. Stata Journal, StataCorp LP, vol.15(2), 512-522.
Dickson, V., & Myatt, T. (2002). The determinants of provincial minimum wages in Canada. Journal of Labor Research, 23, 57–65.
Eruygur H. O. (2005). Generalized maximum entropy (GME) estimator: formulation and a Monte Carlo study. Paper presented at the VII National Symposium on Econometrics and Statistics, Istanbul, Turkey, May 26-27.
Gallet, C. (2004). The determinants of living wage rates. The Social Science Journal 41: 661-666.
Golan, A. (2006). Information and Entropy Econometrics-A Review and Synthesis. Foundations and Trends in Econometrics: Vol. 2: No. 1–2, pp 1-145. https://dx.doi.org/10.1561/0800000004
Golan, A., Judge, G. Garrett, & Miller, D. (1996). Maximum entropy econometrics: robust estimation with limited data. Chichester [England]: Wiley.
Golan, A., Judge, G. and Miller, D. (1997). The maximum entropy approach to estimation and inference. in Thomas B. Fomby, R. Carter Hill (ed.) Applying Maximum Entropy to Econometric Problems (Advances in Econometrics, Volume 12) Emerald Group Publishing Limited, 3 – 24
Howrey, E.P. (1980). The role of time series analysis in econometric model evaluation. In Evaluation of Econometric Models .275-307
International Labour Office. (2014). Minimum wage systems. International Labour Conference, 103rd Session, Geneva
Jaynes, E. T. (1957). Information Theory and Statistical Mechanics. Physics Reviews, Vol.106 Issue 4, 620–630.
Jaynes, E. T. (1979). Where Do We Stand on Maximum Entropy?. In the Maximum Entropy Formalism, Levine, R. D. and Tribus, M., eds. Cambridge, MA: MIT Press (1979), 115–118.
Junvith, P. (2011). The evolution of the minimum wage system and the social security system in Thailand. Faculty of Economics, Thammasat University. (in Thai).
Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90, (1), 1-44
Labour Protection Act (No.3) B.E. 2551. published in the Government Gazette Vol. 125, Part 39 (a) on 27 February B.E. 2551
Lee, JJ. and Cheon, SY. (2014). Dual Generalized Maximum Entropy Estimation for Panel Data Regression Models. Communications for Statistical Applications and Methods; 21:395-409.
Levin, A., Lin, C.F., & Chu, C. (2002). Unit root test in panel data: asymptotic and finite sample properties. Journal of Econometrics, 108, 1-24
Mangahas, R., (2011). The Role of Social Dialogue in Minimum Wage Determination in the Philippines. Institute for Labor Studies Discussion Paper Series 2011, Institute for Labor Studies. Available at: https://ilsdole.gov.ph/wp-content/uploads/2012/07/Mangahas_Social-Dialogue-in-Minimum-Wage-Determination-Study.pdf.
Mittelhammer, R., G. Judge, and D. Miller. (2000). Econometric Foundations, New York: Cambridge University Press.
Hsiao, C. (2003). Analysis of Panel Data. Cambridge: Cambridge University Press.
Office of the Permanent Secretary. (2005). A study of standard criteria and model for the fixation of the minimum wage in Thailand. TDRI: Thailand Development Research Institute. (in Thai).
Office of the Permanent Secretary. (2017). The result of the survey, the cost of the labor needed to develop the industrial sector in 2559 B.E. Ministry of Labour. (in Thai).
Office of the Wage Committee. (2011).Manual operation of the Subcommittee to consider the provincial minimum wage rate. Ministry of Labour. (in Thai).
Pember, R. and Dupre, M.T. (1997). Statistical aspects of minimum wage determination. International Labor Organization. Available at: https://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/publication/wcms_087898.pdf.
Phiukhao, M. (2003). The Minimum Wage Determination in Thailand. Master of Economics Thesis in Business Economics, Graduate School, Khon Kaen University. (in Thai).
Poonsawat, T. (2006). Factors determining the minimum wage rate in Thailand. Master of Economics Thesis. Ramkhamhaeng University. (in Thai).
Pukelsheim, F. (1994). The Three Sigma Rule. The American Statistician, 48(2), 88-91. doi:10.2307/2684253
Shannon, C. E. (1948). A Mathematical Theory of Communication. The Bell System Technical Journal, Vol. 27, 379–423, 623–656.
Sikamat, S., Chantapong, S., Buranathanung, N., Dasgupta, S., Bhula-or, R., Rodpengsangkaha, D., Tunsri, K., Yungyeen, P., Jumnong, A., Siripanyawat, S. and Laorkid, K. (2013). Thai labour market and its roles in strengthening the Thai economy. Bank of Thailand. (in Thai)
Song, S. H., and Cheon, S. Y. (2006). A Study of Generalized Maximum Entropy Estimator for the Panel Regression Model. The Korean Journal of Applied Statistics 19 pp.521-534. DOI:10.5351/KJAS.2006.19.3.521
Srichaikul, W., Yamaka, W., Maneejuk, P., and Sriboonchitta, S. (2018). Comparison of entropy measures in generalized maximum entropy estimation. Journal of Physics Conference Series 1053(1):012021 · July 2018.doi: 10.1088/1742-6596/1053/1/012021
Sriboochitta, S., Liu, J. and Sirisrisakulchai, J. (2014). Willingness-to-pay estimation using generalized maximum-entropy: a case study. International Journal of Approximate Reasoning Volume 60, May 2015, Pages 1-7. DOI: 10.1016/j.ijar.2015.02.003
Sriboochitta, S., Yamaka, W., Maneejuk, P. and Pastpipatkul, P. (2017). A generalized information theoretical approach to non-linear time series model. In Robustness in Econometric (Springer Cham) 333-348
Sripiean, V. (1996). Establishing of appropriate minimum wage rate fixing factors for Thailand. Master of Science Thesis (Labor and Welfare Development). Thammasat University. (in Thai)
Tunlayawasinpong, S. (2005). Criteria for determining minimum wage and its effect on employment and wages in the industry. Master of Arts Thesis (Business Economics). Faculty of Economics.Thammasat University. (in Thai).
Wooldridge, J. (2002). Econometric Analysis of Cross Section and Panel Data. The MIT Press Cambridge, Massachusetts London, England.
Bersales, L.G.S., and Lucagbo, M.D.C. (2014). Determinants of Regional Minimum Wages in the Philippines. The Philippine Statistician Vol. 63, No. 2 (2014), pp. 71-85
Blais, A., Cousineau, J., & McRoberts, K. (1989). The determinants of minimum wage rates. Public Choice, 62,15–24.
Boonsripracha, C. (1996). The concurrence of Minimum Wage Fixing and Economic Conditions in Thailand. Master of Science Thesis (Economics), Major Field Economics, Department of Economics. Kasetsart University. (in Thai).
Button, K.S., Ioannidis, J.P., Mokrysz, C., Nosek, B.A., Flint, J., Robinson, E.S. and Munafò, M.R. (2013). Power failure: why small sample size undermines the reliability of neuroscience. Nature Reviews Neuroscience 14(5) 365-376
Chinnakum, W. and Boonyasana, P. (2017). Modeling Thailand Tourism Demand: A Dual Generalized Maximum Entropy Estimator for Panel Data Regression Models. Thai Journal of Mathematics: Special Issue on Entropy in Econometrics:67-78.
Ciavolino, E. and Al-Nasser, A. D. (2009). Comparing generalized maximum entropy and partial least squares methods for structural equation models. Journal of Nonparametric Statistics 21, 1017-1036.
Clark, T., and Linzer, D. (2015). Should I Use Fixed or Random Effects?. Political Science Research and Methods, 3(2), 399-408. doi:10.1017/psrm.2014.32
Corral, P. and Terbish, M. (2015). Generalized maximum entropy estimation of discrete choice models. Stata Journal, StataCorp LP, vol.15(2), 512-522.
Dickson, V., & Myatt, T. (2002). The determinants of provincial minimum wages in Canada. Journal of Labor Research, 23, 57–65.
Eruygur H. O. (2005). Generalized maximum entropy (GME) estimator: formulation and a Monte Carlo study. Paper presented at the VII National Symposium on Econometrics and Statistics, Istanbul, Turkey, May 26-27.
Gallet, C. (2004). The determinants of living wage rates. The Social Science Journal 41: 661-666.
Golan, A. (2006). Information and Entropy Econometrics-A Review and Synthesis. Foundations and Trends in Econometrics: Vol. 2: No. 1–2, pp 1-145. https://dx.doi.org/10.1561/0800000004
Golan, A., Judge, G. Garrett, & Miller, D. (1996). Maximum entropy econometrics: robust estimation with limited data. Chichester [England]: Wiley.
Golan, A., Judge, G. and Miller, D. (1997). The maximum entropy approach to estimation and inference. in Thomas B. Fomby, R. Carter Hill (ed.) Applying Maximum Entropy to Econometric Problems (Advances in Econometrics, Volume 12) Emerald Group Publishing Limited, 3 – 24
Howrey, E.P. (1980). The role of time series analysis in econometric model evaluation. In Evaluation of Econometric Models .275-307
International Labour Office. (2014). Minimum wage systems. International Labour Conference, 103rd Session, Geneva
Jaynes, E. T. (1957). Information Theory and Statistical Mechanics. Physics Reviews, Vol.106 Issue 4, 620–630.
Jaynes, E. T. (1979). Where Do We Stand on Maximum Entropy?. In the Maximum Entropy Formalism, Levine, R. D. and Tribus, M., eds. Cambridge, MA: MIT Press (1979), 115–118.
Junvith, P. (2011). The evolution of the minimum wage system and the social security system in Thailand. Faculty of Economics, Thammasat University. (in Thai).
Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90, (1), 1-44
Labour Protection Act (No.3) B.E. 2551. published in the Government Gazette Vol. 125, Part 39 (a) on 27 February B.E. 2551
Lee, JJ. and Cheon, SY. (2014). Dual Generalized Maximum Entropy Estimation for Panel Data Regression Models. Communications for Statistical Applications and Methods; 21:395-409.
Levin, A., Lin, C.F., & Chu, C. (2002). Unit root test in panel data: asymptotic and finite sample properties. Journal of Econometrics, 108, 1-24
Mangahas, R., (2011). The Role of Social Dialogue in Minimum Wage Determination in the Philippines. Institute for Labor Studies Discussion Paper Series 2011, Institute for Labor Studies. Available at: https://ilsdole.gov.ph/wp-content/uploads/2012/07/Mangahas_Social-Dialogue-in-Minimum-Wage-Determination-Study.pdf.
Mittelhammer, R., G. Judge, and D. Miller. (2000). Econometric Foundations, New York: Cambridge University Press.
Hsiao, C. (2003). Analysis of Panel Data. Cambridge: Cambridge University Press.
Office of the Permanent Secretary. (2005). A study of standard criteria and model for the fixation of the minimum wage in Thailand. TDRI: Thailand Development Research Institute. (in Thai).
Office of the Permanent Secretary. (2017). The result of the survey, the cost of the labor needed to develop the industrial sector in 2559 B.E. Ministry of Labour. (in Thai).
Office of the Wage Committee. (2011).Manual operation of the Subcommittee to consider the provincial minimum wage rate. Ministry of Labour. (in Thai).
Pember, R. and Dupre, M.T. (1997). Statistical aspects of minimum wage determination. International Labor Organization. Available at: https://www.ilo.org/wcmsp5/groups/public/---dgreports/---stat/documents/publication/wcms_087898.pdf.
Phiukhao, M. (2003). The Minimum Wage Determination in Thailand. Master of Economics Thesis in Business Economics, Graduate School, Khon Kaen University. (in Thai).
Poonsawat, T. (2006). Factors determining the minimum wage rate in Thailand. Master of Economics Thesis. Ramkhamhaeng University. (in Thai).
Pukelsheim, F. (1994). The Three Sigma Rule. The American Statistician, 48(2), 88-91. doi:10.2307/2684253
Shannon, C. E. (1948). A Mathematical Theory of Communication. The Bell System Technical Journal, Vol. 27, 379–423, 623–656.
Sikamat, S., Chantapong, S., Buranathanung, N., Dasgupta, S., Bhula-or, R., Rodpengsangkaha, D., Tunsri, K., Yungyeen, P., Jumnong, A., Siripanyawat, S. and Laorkid, K. (2013). Thai labour market and its roles in strengthening the Thai economy. Bank of Thailand. (in Thai)
Song, S. H., and Cheon, S. Y. (2006). A Study of Generalized Maximum Entropy Estimator for the Panel Regression Model. The Korean Journal of Applied Statistics 19 pp.521-534. DOI:10.5351/KJAS.2006.19.3.521
Srichaikul, W., Yamaka, W., Maneejuk, P., and Sriboonchitta, S. (2018). Comparison of entropy measures in generalized maximum entropy estimation. Journal of Physics Conference Series 1053(1):012021 · July 2018.doi: 10.1088/1742-6596/1053/1/012021
Sriboochitta, S., Liu, J. and Sirisrisakulchai, J. (2014). Willingness-to-pay estimation using generalized maximum-entropy: a case study. International Journal of Approximate Reasoning Volume 60, May 2015, Pages 1-7. DOI: 10.1016/j.ijar.2015.02.003
Sriboochitta, S., Yamaka, W., Maneejuk, P. and Pastpipatkul, P. (2017). A generalized information theoretical approach to non-linear time series model. In Robustness in Econometric (Springer Cham) 333-348
Sripiean, V. (1996). Establishing of appropriate minimum wage rate fixing factors for Thailand. Master of Science Thesis (Labor and Welfare Development). Thammasat University. (in Thai)
Tunlayawasinpong, S. (2005). Criteria for determining minimum wage and its effect on employment and wages in the industry. Master of Arts Thesis (Business Economics). Faculty of Economics.Thammasat University. (in Thai).
Wooldridge, J. (2002). Econometric Analysis of Cross Section and Panel Data. The MIT Press Cambridge, Massachusetts London, England.
Downloads
Published
2019-08-31
Issue
Section
Articles
License
All opinions and contents in the CMJE are the responsibility of the author(s). Chiang Mai University Journal of Economics reserves the copyright for all published materials. Papers may not be reproduced in any form without the written permission from Chiang Mai University Journal of Economics.
ข้อคิดเห็นที่ปรากฏและแสดงในเนื้อหาบทความต่างๆในวารสารเศรษฐศาสตร์มหาวิทยาลัยเชียงใหม่ ถือเป็นความเห็นและความรับผิดชอบโดยตรงของผู้เขียนบทความนั้นๆ มิใช่เป็นความเห็นและความรับผิดชอบใดๆของวารสารเศรษฐศาสตร์ มหาวิทยาลัยเชียงใหม่
บทความ เนื้อหา และข้อมูล ฯลฯ ในวารสารเศรษฐศาสตร์มหาวิทยาลัยเชียงใหม่ ถือเป็นลิขสิทธิ์เฉพาะของคณะเศรษฐศาสตร์มหาวิทยาลัยเชียงใหม่ หากบุคคลหรือหน่วยงานใดต้องการนำทั้งหมดหรือส่วนหนึ่งส่วนใดไปเผยแพร่ต่อหรือเพื่อกระทำการใดๆ จะต้องได้รับอนุญาตเป็นลายลักษณ์อักษร จากวารสารเศรษฐศาสตร์ มหาวิทยาลัยเชียงใหม่
