Consumption Insurance against the Chronic Illness: Evidence from Thailand

Authors: Yuthapoom Thanakijborisut

Abstract:

This paper studies consumption insurance against the chronic illness in Thailand. The study estimates the impact of household consumption in the chronic illness on consumption growth. Chronic illness is the health care costs of a person or a household’s decision in treatment for the long term; the causes and effects of the household’s ability for smooth consumption. The chronic illnesses are measured in health status when at least one member within the household faces the chronic illness. The data used is from the Household Social Economic Panel Survey conducted during 2007 and 2012. The survey collected data from approximately 6,000 households from every province, both inside and outside municipal areas in Thailand. The study estimates the change in household consumption by using an ordinary least squares (OLS) regression model. The result shows that the members within the household facing the chronic illness would reduce the consumption by around 4%. This case indicates that consumption insurance in Thailand is quite sufficient against chronic illness.

Keywords: Consumption insurance, chronic illness, health care, Thailand.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1127555

References:

[1] Cochrane, J. (1991). A Simple Test of Consumption Insurance. Journal of Political Economy, 99(5), 957–976.
[2] Gertler, P., and Gruber, J. (2002). Insuring consumption against illness. American Economic Review, 92(1), 51–70.
[3] Dercon, S., Hoddinott, J, and Woldehanna, T. (2005). Shocks and Consumption in 15 Ethiopian Villages, 1999-2004. Journal of African Economies, 14(4), 559-585.
[4] Harrower, S., Hoddinott, J., (2005). Consumption Smoothing in the Zone Lacustre, Mali. Journal of African Economies, 14(4), 489-519.
[5] Heltberg, R., Lund, N., (2009). Shocks, Coping, and Outcomes for Pakistan’s Poor: Health Risks Predominate. Journal of Development Studies, 45(6), 889-910.
[6] Wagstaff, A. (2007). The economic consequences of health shocks: Evidence from Vietnam. Journal of Health Economics, 26(1), 82-100.
[7] Beegle, K., De Weerdt, J. and Dercon, S. (2008). Adult Mortality and Consumption Growth in the Age of HIV/AIDS. Economic Development and Cultural Change, 56(2), 299-326.
[8] Gertler, P., Levine, D.I., and Moretti, E. (2009). Do microfinance programs help families insure consumption against illness? Health Economics, 18(3), 257-273.
[9] Somi, M., Butler, J., Vahid, F., Njau, J., and Abdulla, S. (2009). Household Responses to Health Risks and Shocks: A Study from Rural Tanzania Raises Some Methodological Issues. Journal of International Development, 21(2), 200-211.
[10] Linnemayr, S., (2010). Consumption Smoothing and HIV/AIDS: The Case of Two Communities in South Africa. Economic Development and Cultural Change, 58(3), 475-506.
[11] Porter, C., (2012), Shocks, Consumption and Income Diversification in Rural Ethiopia. Journal of Development Studies, 48(9), 1209-1222.