Poverty and Trickle Down Impacts

1
Poverty and Trickle Down Impacts

• Chalongphob Sussangkarn
• Thailand Development Research Institute
• Presented at the 2001 Year-End Conference on
  Poverty Reduction Strategies
• 24-25 November 2001, Ambassador City,
  Jomtien,Chon Buri

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Data Sources

• Socio-Economic Surveys
• Social Accounting Matrix 2000

3
Socio-economic Survey

• Socio-Economic Survey data shows that income is
  highly concentrated at the low end.
• Using specific level for the poverty line will
  not fully illuminate the problem of poverty.
• Share of population below a particular income
  level increases rapidly with that level of
  income

4
SES 2000
5
SES 2000
18.0
900
6
SES 2000
21.8
7
SES 2000
39.4
1,500
8
SES 2000
51.9
9
SES 2000
71.3
Mean Income 3,407
10
SES 2000
Mean 3,407
11

• Compared to past years, proportion of population
  below various real income levels are lower in
  2000 than in 1988 and 1992.
• However, the the curve for 2000 is higher than in
  1996 and 1999.

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(Year 2000 Prices)
1988
2000
13
(Year 2000 Prices)
1992
2000
14
(Year 2000 Prices)
2000
1996
15
(Year 2000 Prices)
2000
1999
16
Latest Socio-Economic Survey 2001(March-May)

• Average HH Income fell 2.7 but increased 4.2 in
  Northeast and 1.8 in North
• Average Expenditure increased by 1.4

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Social Accounting Matrix 2000 (SAM)

• Data showing detailed linkages in the economy
• Includes production, income and expenditures
• Can be used to analyze impacts on HH incomes from
  various changes

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Structure of SAM 2000

• 110 Accounts
• 76 Sectors of Production
• Labor and Capital in Agriculture and
  Non-Agriculture
• 20 Households by Deciles and Agriculture and
  Non-Agriculture
• Built using 2000 National Accounts, SES, Labor
  Force Surveys, Balance of Payments and 1998 I-O
  Table)

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Summary of SAM 2000 (Billion Baht)
20
Average Monthly Income Per Headand Income Shares
by Deciles
2000
2000
Poorest
1990
Richest
21

• Impacts on income of Poorest 20 from changes in
  various expenditures
• Method Fixed Price Multipliers (Pyatt and Round,
  Economic Journal 1979)

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Expenditure Impacts on Income ofPoorest 20
Income Share of Poorest 20 in 2000 3.9
23
Impacts from various Exports
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Export of Agriculture and Food
25
Export of Industrial Products
26
From Specific Government Spending
27
Short-fall from 1 Per day (45 Baht)
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Solving Problem Through Trickle Down Effect Very
Difficult