CONSUMPTION VC THE HEALTH AND ENVIRONMENTAL SHOCKS: THE CASE OF THAILAND

Abstract

This paper studies consumption insurance against the health and environmental shocks (HES) in Thailand. The paper estimates the impact of household consumption from the change in the health and environmental shocks on total consumption growth and food consumption growth. The HES are measured by the change in health status when at least one of member within the household treated at the service providers as an inpatient. The inpatient is the health care cost of an individual or household’s decision in seeking medical care that causes and effects of the household’s ability to smooth consumption. This paper uses the data from the Household Social-Economic Panel Survey during 2005 and 2007. The survey collected data on demographic characteristics by the interview from 6,000 households, approximately, from every province, both inside and outside municipal areas in Thailand. The study estimates the change of consumption by using an ordinary least squares (OLS) regression model. The results show that the members within the household changing as inpatient would reduce around 4 percent on total consumption and 6 percent on food consumption, respectively. These results compared to the consumption insurance in the US that consumption drops around 14 percent when at least one household member gets sick. It implies that Thailand has much better consumption insurance. This case indicates that consumption insurance in Thailand is quite sufficient against HES. For the case of Thailand, the well-insured consumption against HES may lead to decrease the spending in public health insurance.