Economic Factors Affecting Household Debt in Thailand

Abstract

This research aims to study Thai household debt and economic factors affecting Thai household debt classified by 4 objectives such as debt for household expenditures, debt for agriculture, debt for non-agricultural businesses, and debt for buying/renting houses and lands. The 7 economic factors are consisting of the average monthly income per household, average monthly expenditure per household, subsidies, revenue tax, excise tax, investment, and gross domestic product. Secondary data were collected from various related government offices during the years 2002–2017.

Thai household debt was analyzed by document content analysis and the economic factors affecting Thai household debt were analyzed by Multiple Regression model, which is to study the relationship between economic factors (independent variables) and debt (dependent variables). The first round analyzes all 7 independent variables one by one. To determine the significant variables, a multiple regression analysis was performed, in subsequent cycles by eliminating insignificant independent variables. Multiple regression analysis excludes the most insignificant independent variables one by one, until the result was that all independent variables were significant (though insignificant variables in the first round of analyses may be significant in subsequent cycles of analyses).

The study found that Thailand, between 2002 and 2017, the growth rate of household debt to gross domestic product (GDP) tends to increase. The most household debt is debt for household expenditures followed by debt for buying/renting houses, debt for agriculture, and debt for non-agricultural business. Economic factors affecting household debt classified by 4 objectives such as 1) debt for household expenditures that was positive correlations including: the average monthly income per household, subsidies and gross domestic product, and negative correlations including: average monthly expenditure per household, revenue tax, excise tax. 2) Debt for agriculture that was positive correlations including: the average monthly income per household, and negative correlations including: subsidies and investment. 3) Debt for non-agricultural business that was positive correlations including: the average monthly income per household, and negative correlations including: subsidies, excise tax, investment, and gross domestic product. 4) Debt for buying/renting houses that was positive correlations including: the average monthly income per household, and negative correlations including: average monthly expenditure per household, subsidies, excise tax, and investment.