Factors affecting household debt in Thailand

Analysis of Difference in Household Debt across Regions of Thailand

“…Lea, Webley, and Walker [17] and Wildauer [18] revealed that registered marriage and the number of family members contribute a positive impact to household debt in the USA. The results from these studies are in line with Lerskullawat [10] in Thailand. Crawford and Faruqui [19] found that higher household income and age led to larger household debt in Canada.…”

“…For example, Muthitacharoen, Nuntramas and Chotewattanakul [14] concluded from their investigation that a decrease in income level can lead to increased borrowing that is generally for consumption purposes. Similarly, Lerskullawat [10] found that there exists a negative relationship between household income and household debt. However, research works on the household income and debt nexus in other countries have produced contrasting findings, such as the study by Baker [15] in the USA that indicated that American households tend to have larger household debt as their income rises, probably because they can access loan sources more conveniently and easily than people in the low-income group.…”

“…They concluded that marital status, education, age of household head, household income, and household asset value could determine the household debt burden. Lerskullawa [10], using the national-level data, investigated factors affecting household debt in Thailand, and concluded that social factors, including education, marriage, and young population, and economic factors, including household income, inflation rate, and household consumption expenditure play an important role in total household debt. Similarly, Chotewattanakul, Sharpe and Chand [11] suggested that high household income and household savings could reduce the probability of being over-indebted, while a higher level of dependency on finance can lead to a higher probability of being over-indebted.…”

“…Thus, this paper examines the determinants of household debt in Thailand considering distributional heterogeneity in the panel quantile regression framework. Moreover, although the determinants of household debt in Thailand have already been studied to a great extent [7][8][9][10], none of the previous studies produced results that comprehensively reflect the actual household debt situation. This is because the studies were conducted either at the aggregate level or for a specific area, resulting in findings that were not strong enough to provide policy recommendations to effectively solve the household debt problem in each geographic region.…”

“…Thus, it can be concluded that the presence of household debt divergence is a meaningful explanation for, as well as a reflection of, the inadequacy of the state's policies to solve household income disparity and debt problems. In addition, although the determinants of household debt in Thailand have already been studied (see, [7][8][9][10]), the inconclusive results were obtained when samples, models, and variables used for analysis were different. We also argue that the main shortcoming of the literature is that the results may be biased due to the neglect of distributional heterogeneity.…”