Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
The Impact of Structural Household Expenditure on Public Tran
sportation Service Management in Thailand
Tanpat Kraiwanit*, Atipon Satranarakun** and Chayawee Nakajiraphan***
This research studies the relationship between transportation expenditure and household’s
source of income such as income in-cash, income in-kind, and other receives. Household
has automatic transportation expenditure of 1,498.706 baht per month and every 1 baht
increase of income in-cash, household would incur additional 0.037 baht of transportation
expenditure. If income in-kind increases by 1 baht, transportation expenditure would
increase by 0.380 baht and if other receives increase by 1 baht, transportation expenditure
would increase by 0.058 baht. It can be concluded that type of business affects the future
trend when considering on the cost of transportation with the level of statistical significance
at 0.05.
For the future, the study should expand the definition of return on investment to include
impact of the project transportation. Considering only the return on the transportation
infrastructure itself is not enough for decision of government policy because of its impact to
other industries such as real estate, transportation cost reduction, tourism and others.
1. Introduction
Household consumption is a significant factor driving the economy. This is because h
ouseholds unit is one of the three main economic units, namely households, businesses, an
d the government. Household unit is the smallest unit in the society but comprises of the larg
est numbers nationwide at approximately 19.88 million households in 2011 with aggregated
income of 5,572,742 million baht or 52.87 percent of the national income.
Factors of production owned by a household incorporate of 1) land, 2) labour, 3) capit
al, and 4) entrepreneurship, household unit is also the source of entrepreneur for the busine
ss unit and household members are the source to consumption of products and services pro
duced by the business unit resulting in the economic activities and circulation of cash flow in
the economy, hence, the national income.
Of the 52 percent of private sector consumption in 2011, the largest proportion of the
consumption was food, beverage, and tobacco (15.67 percent of the national income) then f
ollowed by travelling and transportation (13.77 percent of the national income), agricultural p
roducts (8.84 percent of the national income), and services (60.0 percent of the national inco
me), respectively. It seems that if the government wishes to increase the national income, pr
ivate sector consumption supporting policies should be issued especially on the consumptio
n of food, beverage, tobacco, travelling, and transportation. In any case, the stimulated cons
umption shall affect the allocation of resources, form changes, and transfer of resources to t
he most optimum places resulting in more investment and employment.
______________________________________________________________
Tanpat Kraiwanit*, Faculty of Economics,Rangsit University,Thailand.
Atipon Satranarakun**DBA, Nakorn Phanom University,Thailand.
Chayawee Nakajiraphan***DBA, Krungthai Bank Public Company limited. Thailand
*dr.tanpat@gmail.com **atipon.rmutt@gmail.com *** chayavee_2007@hotmail.com
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
However, in 18 years (1993-2011) the national income has increased from 2,47
0,908 million baht in 1993 to 4,599,655 million baht in 2011 or at 3.35 percent growth
. Though, private sector consumption grew by 3.03 percent (lower growth rate) or by
calculating in term of the rate of private sector consumption against the national inco
me, the number also decreased from 55.9 percent in 1993 to 52.00 percent in 2011 re
flecting the decrease of dominancy of the private sector consumption.
Such phenomena resulted from the changed consumption behavior of the priva
te sector especially the changed behavior in household unit. Therefore, understandin
g household consumption behavior is very important. In the past 25 years especially b
etween 1987 and 2007, many scholars have conducted research on consumption beh
aviour. However for the past 5 years (2008-2012), works regarding consumption beha
viour have reduced and the author has different view from the previous works. The a
uthor is mainly focused on sources of income and expenditure of household, especiall
y in transportation expenses which may lead to infrastructure development of Thailan
d in the future
2. Literature Review
Hunjangsitti (2002) studied consumption behaviour and the revival of Thai
economy and analysed in the scale of national and regional. He used the 1998/99
household socio-economic survey of the National Statistics Office and evaluated
consumption volume by using 2 equations, which were C = a+bYandLog C = a+bLogY,
and evaluated by types of expenditures for the total of 9 types. He found that MPC
and elasticity of expenditure by type were different from 0.51-0.89 and the received
R2 were between 0.25-0.80. In 2005, Raktham utilised the 2004 household socioeconomic survey to study household consumption behaviour under the topic of “the
cross-sectional analysis of consumption behaviour and function of Thai households”,
in which highlight of the study was the use of 4 consumption theories such as the
absolute income hypothesis, relative income hypothesis, permanent income
hypothesis, and life-cycle theory of consumption. He found that households
throughout Thailand, relative income hypothesis was best in describing spending
behaviour for consumption. The evaluated equation obtained R-squared equal to
0.670, income elasticity of consumption at 0.811, MPC at 0.580, and coefficient of
dependent variable had statistical significance at 95% confidence interval and
conformed to the set hypothesis. Therefore, Thai households had copy-cat
consumption behaviour even income was not equal.
Researches under the Permanent Income Hypothesis of Milton Friedman
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
Sunthornsima (1969) calculated for the income elasticity of expenditure for the
north-eastern region in 1969 by utilising the 1963 household expenditure survey of
the National Statistics Office. This was the calculation of income elasticity of
consumption where the equation was Log C = Co + Cy Log Y that was modified from C =
Co YCY which was an exponential function. The result showed C = 0.625 R2 = 0.98 for
households in municipal areas throughout the country and C = 0.810 R2 = 0.99 for
rural areas throughout the country.
Chaipravat (1970) studied on a topic of “A Cross-Section and Time Series Analys
is of Consumption Expenditure” by using the expenditure data of households in Bangk
ok and Thonburi, municipal area in 1962. Consumption was evaluated by using the pe
rmanent income hypothesis in the form of straight-line equation and log liner separat
ed by 10 types of expenditures. The study utilised OLS (Ordinary Least Squares) evalua
tion method and expenditure was used as permanent income and also added househ
old size into the equation. Meanwhile, the log linear was better than the straight-line
equation and household size could not statistical significantly explain consumption wh
ile permanent income was greatly affected consumption. For elasticity, necessary pro
ducts were more elastic than luxury products. Thammatinno (1973) utilised the 1962
household expenditure survey but did not include household size into the equation. T
he evaluation used log liner equation and Two Stage Least Squares (TSLS). It was foun
d that the evaluation obtained R2 higher than of the study by Chaipravat (1970). The fi
ndings regarding consumption elasticity were harmonised in terms of elasticity of nec
essary products and luxury products.
3. Methodology
This research utilised Friedman’s concept (1957) as its model since there are m
any researches affirming that Friedman’s permanent income hypothesis can be sound
ly tested with data in Thailand and the statistical data obtained was more widely acce
pted comparing to other theories. This concept is called the relative income hypothesi
s and can be found in the text book “The General Theory of Employment, Interest and
Money”.
Data analysis
Data was analysed by two methods. First, by using descriptive explanation of Th
ai households in various dimensions such as the general characteristic, income, expen
diture, debt status, asset, and others by analyzing the 2011 household socio-economy
survey. Second, it also was analyzed expert opinion questionnaire which deployed by
Delphi Technique and collected 266 samples from 5 private and state enterprises suc
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
h as railway authority, airport authority, airline business provider
, including bus and taxi service sectors.
Population and Samples
The study population in this research was Thai private household s that their da
ta was recorded in terms of “income from sources, expenditure on consumption, debt
status, asset, household member structure, type of residence, migration and remitta
nce, receiving of welfare/government support, and usage of government services”. Th
e survey conducted by the National Statistics Office in accordance with the project of
household socio-economic survey in 2011 proceeded to survey in 76 provinces for the
total of 52,000 households accounted for approximately 3.4 percent of all the househ
olds in Thailand. However, only data of 42,083 model households could be used and c
ould be divided regionally as follow: Bangkok 5.8%, central region 29.2%, northern reg
ion 24.6%, north-eastern region 25.9%, and southern region 14.4%. In term of adminis
trative area, data could be divided as 61.1% for households residing in municipal area
s and 38.9% outside municipal areas.
4. Results
Table 1: Factor regarding source of income and transportation expenditure
Unstandardiz
Model
ed Coefficien
t
Sig.
ts
(Constant)
1498.706
37.676
.000
Income in-cash (A1)
.037
81.531
.000
Income in-kind (A2)
.380
42.203
.000
Other receives (A3)
.058
9.825
.000
Equation: Transportation = 1498.706 + 0.037A1 + 0.380A2 + 0.058A3 : The above
data exhibits the relationship between transportation expenditure and household’s s
ource of income such as income in-cash, income in-kind, and other receives. Househol
d has automatic transportation expenditure at 1,498.706 baht per month and every 1
baht increase of income in-cash, household would incur additional 0.037 baht of trans
portation expenditure. If income in-kind increases by 1 baht, transportation expenditu
re would increase by 0.380 baht and if other receives increase by 1 baht, transportati
on expenditure would increase by 0.058 baht.
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
Table 2: Factor regarding expenditure and transportation expenditure
Unstandardized C Standardized
oefficients
Coefficients
Model
t
Sig.
Std. Er
B
Beta
ror
(Constant)
87.415 40.725
2.146 .032
Dwelling (A1)
.029
.005
.023
5.360 .000
Household (A2)
.628
.032
.105
19.555 .000
Servants (A3)
.128
.040
.014
3.187 .001
Personal supplies(A4)
.486
.030
.079
16.293 .000
Medical (A5)
.048
.019
.011
2.579 .010
Communication (A6)
2.321
.049
.253
47.554 .000
Recreation (A7)
.409
.045
.042
9.106 .000
Clothes (A8)
.514
.027
.093
19.023 .000
Other expense (A9)
.221
.006
.159
35.086 .000
Equation: Transportation = 87.415 + 0.29A1 + 0.628A2 + 0.128A3 + 0.486A4 + 0.
048A5 + 2.321A6 + 0.221A7 + 0.409A8 + 0.514A9 : The above data exhibits the equation
of transportation expenditure and other expense that are positively correlated. In oth
er word when other expense is incurred, transportation expenditure also suggest is in
creased.
Table 3: Trend in the future (around 10-20 years) opinion when public transportation
have been completed
Standard Degree o
Description
No. Mean
deviation f opinion
In the future, transportation shall be more
266 4.2368 .65611 High
crucial in accordance with the rapid expansion
of economy and society. The number of people
using the mass rapid transit system is likely to
increase, continuously.
The initialization of AEC shall cause more cross- 266 4.0338 .76896 High
border workforce movement incorporating
with the rising cost of housing in urban areas,
residential estates in suburb areas shall be
expanded so railway transportation will be
more preferred.
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
Description
More usage of mass transit system is resulted
from congested traffic and higher fuel price;
therefore, traveling by private transportation is
more costly. Mass transit system is convenient,
quick, and safe. Usage of mass transit system
shall reduce people’s transit expense.
There will be more competition in the future so
that people shall have more traveling options.
At the same time, service fee is likely to increas
e because of the rise of fuel cost and other cost
s; therefore, traveling expense shall increase, t
oo.
Standard Degree o
deviation f opinion
266 4.1992 .79251 High
No. Mean
266 4.0526
.81787
High
Table 4: The transportation business opinion when managing connect with other tran
sportation means
Standard Degree o
Description
No. Mean
deviation f opinion
Currently, railway networks in Thailand do not l 266 4.0338 .75908 High
ink with each other, therefore, prohibiting cont
inuous transit. The State Railway of Thailand’s t
rain and the Mass Rapid Transit of Thailand tha
t emphasized the development in Bangkok and
the Greater Bangkok Area.
Transit linkages still lack necessary facilities. Fo
r example, non-continuous linkage corridor and
lack of roof in areas such as at the bus stop bel
ow the train station and linkage walkways to ot
her train systems still have no roof and proper
walkways.
266 4.0564
.86035
High
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
In the future, the mass rapid transit system sha
ll be the main mean of transportation of people
in Bangkok. Therefore, the mass rapid transit s
ystem shall act as the park and ride function an
d other transportation systems shall act as the f
eeder. Therefore, bus routes shall be shorter. T
he mass rapid transit system shall support the
park and ride function to facilitate ease of trave
l for the people where they can park their cars
at a train station then travel to their destinatio
ns. The park and ride concept shall include boat
ports so that people can travel more convenie
ntly and quicker. The Airport Rail Link will conn
ect land transportation, water transportation, a
nd air transportation together.
266 4.1842
.74726
High
Table 5: Affect the economy, expansion of urban areas, cost of goods transportation,
and the future service opinion when public transportation have been completed
Standard Degree o
Description
No. Mean
deviation f opinion
Create more employment especially for real es
266 4.1805 .63048 High
tate sector, houses, condominium, and shoppi
ng mall businesses locating paralleling and nea
r the public transportation system especially fo
r the mass rapid transit system stations.
Businesses shall move to suburb areas and red
uce population crowding resulting in the reduc
tion of population congestion in the city and ra
pid expansion of urban areas.
266 4.0714
.77128
High
The overall traveling cost shall reduce and hous
ehold expense will be less. Transportation of p
eople and goods will be more efficient. Distribu
tion of goods and services to other parts of the
country shall be speedy.
266 4.0564
.86908
High
The overall import of fuel shall reduce in accor
266 3.8947
.91745
High
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
Description
No.
Mean
Standard Degree o
deviation f opinion
dance with the likeliness of the reduction of fu
el consumption by the people resulting in less t
rading deficit.
5. Conclusions and Recommendations
GROUP 1 URBAN TRAIN
Thailand have urban train only in Bangkok which comprise of 4 Operator. When urban
train in Bangkok carries out all line connections in the future, travelling in Bangkok wi
ll be more convenient and traveling time will be reduced. Government should conside
r approving more future projects, even though their financial returns might be negativ
e but nation will gain by economic productivity overall. There are 4 operators in Bangk
ok, therefore we should study how to connect all of them together to make it simple f
or passengers and be in a reasonable budget. Now each operator still operate as own
business unit. The regulator should find the solution to connect all operators to utilis
e all projects to gain maximum benefits for the government.
1. BTS train (sky train), Bangkok Metropolitan local governor is project owner.
Operated by private sector, Bangkok Mass Transit System Public Company
(BTSC). Total Green Line Project 82 Km. BTS train: It is the first operator in
Thailand whose operating route runs through the main location in the city
centre in the heart of Bangkok and will have extension where the routes are
expected to increase passenger, but fare price is relatively high for most
Bangkok commuters. Moreover, we should study how price can perhaps be
reduced to support public transportation for mass population.
2. MRTA (underground), Mass Rapid Transit Authority of Thailand is a state
enterprise providing trains for Bangkok public transportation. They have
schedule to operate all in Bangkok within year 2029. Now MRTA has been
running only 1 line since 2004. Bangkok Metro Public Company (BMCL)
operates second line train in Thailand as underground train (existing of
MRTA 44.7 Km.). MRTA: It now operates 1 line in Bangkok,(but MRTA has not
met its targeted passengers as they will need the rest line to be completed,
and then the network will be able to serve more passengers in the future.
The problem of MRTA is that they cannot operate by themselves; therefore
they need contractor to operate as concession. Airport Rail Link Project:
Main duty of this project is to connect the 2 airports in Bangkok and
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
facilitate passengers using both airports. A secondary objective is to serve
people who live in suburb to travel to city centre and those who live close to
the stations. However, the location of each station are not easily accessible,
therefore Airport Rail Link Project should develop access area for each
station such as connect to Bangkok public bus to feed passenger to the
station.
3. State Railway of Thailand (SRT): It is the agency running the main rail system
in Thailand. The routes also have access into the city. SRT have old route that
operated to link the passengers from the suburb and provinces around
Bangkok. They should seek to improve efficiencies in their operation in order
to make it cheaper for the passenger. SRT have also electrified train in new
routes to serve target passengers and move people from suburb to the city
and feed passenger to the other line. SRT system is constructed on its own
land, (need more explanation) therefore (overall cost of project lower than
the other project), passenger will be lower than the other line to encourage
passenger use public transportation.
GROUP 2 BANGKOK PLUBLIC BUS
Bangkok Mass Transit Authority (BMTA) is the main public bus service in the cit
y and suburb around Bangkok. Under management by BMTA, there are more than 1
5,000 buses in service, 24 hours operation and access to the passenger in most area o
f Bangkok and suburb, price subsidy for easy access by the majority of the population
to use public bus. BMTA should continue to run business even though business units i
s not making profits, because BMTA is the main public services to drive Bangkok econ
omic activities. The passenger(s) use( the afford) ticket fee for BMTA buses more than
1,000,000 peoples per day, therefore governor should be subsidy otherwise most of
population access to public bus.
In the future BMTA should find the right solution to run business and need less
subsidies from the BMA in the following aspects:
 Plan service needs to bear feeder to main mass transit in the future as Urban
Train having more connections to the urban trains, cooperating to the urban
train to pick up passenger from the destinations.
 Reduce headway for long route which overlap the other mass transit, increase
headway of short route to urban train and other public transportation at main
station.
 Control the concessionaire of private bus and enforce rule and regulation.
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4
 Improve safety on public service.
GROUP 3 INTERCITY TRAINS
 State Railway of Thailand (SRT) are responsible for moving people between the
cities, Cost of traveling by railway is cheap and appropriate for local people to
travel. Double track project need to be pushed as fast as possible. It will be help
reduce cost of transportation. Logistics process will gain efficiencies.
 Performance of operation need to be improved in order to compete with other
public transportation such as bus, minibus.
 Reengineering is required to bring SRT on par with other mass transit systems in
order to compete.
 Develop route to connect to neighboring countries to reap benefits from the
ASEAN Economic Community cooperation.
 Asset of SRT are huge. It should be developed by professionals.
High Speed Train is under studied to construct in the future, thus under budget
constrain should consider route where we can link to our neighbor project. Governme
nt cannot invest to all regions, so joined with the neighboring countries are needed.
GROUP 4 INTERCITY BUS
Bus and minibus in Thailand are very important, given the condition of geograp
hy in Thailand. Road is main transportation that is available to all regions, especially
where train cannot access. Bus and minibus are available to services variety and faster
than other public transportation.
 Conduct standard of bus and minibus set route of operate to difference line.
 Instill more concern to safety to reduce accident.
 Need to improvement bus performance as performance of driver, standard of
bus conditions.
 Control concessionaire to meet standard of rule and regulation.
GROUP 5 AIR TRANSPORTATION.
The location of Thailand is the aviation hub of Southeast Asia and growth in airp
lane business was very fast. Therefore airport in many locations need extensions and
developments. Airport extension is not only for passenger, but also for cargo.
 Suvanabhumi Airport will require extension and now comeback operate
Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia, ISBN: 978-1-922069-76-4




Donmuang Airport as a low cost airline hub and domestic rout
Phuket International Airport is currently under expansion to serve increasing
number of passenger.
ChiangMai International Airport should study how to extension in order to
serve growth in the northern region.
U-Tapao Airport is very close to tourist city such as Pattaya and can be
developed to be main airport for eastern region.
Udontani Airport is in the Northeast of Thailand which is close to Laos and
Vietnam border. It can be developed to be the main airport in the Northeast of
Thailand and transfer passengers to Laos.
Implications for Overall Transportation of Thailand 2020
Government Policy had plan to invest in infrastructure projects in Thailand to c
onnect to our neighbors and gain competitiveness. These projects may not have direc
t financial returns, but they may bring about huge economic impact such as
 Competitive advantage in logistics
 Economic stimulation
 Income distribution
 Distribute growth rate to other city
 Increase employment/ jobs creation
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