Reaction effects of the COVID-19 pandemic on Thailand’s household expenditure patterns

Abstract

This study examines reactions to the COVID-19 pandemic based on changes in demand. The Exact Affine Stone Index demand system with provincial consumer price indices is used to investigate the direct and indirect effects of the COVID-19 pandemic on Thailand’s household expenditure patterns. The results indicate that Thai households substituted their expenditure between commodity groups towards home-cooked food, mortgage and rent, and health care and away from transport. Our heterogeneity analysis specifies that, based on marginal effects and expenditure and price elasticities, urban households with less educated heads experience an imperative reaction by being more vulnerable to food during the pandemic. Urban households with less educated heads, facing higher-risk perception, are most affected by the COVID-19 pandemic in Thailand.