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Thai Economy: Growth, Trade, and Environment Impact Analysis

Explore the interplay between economic growth, trade dynamics, and environmental indicators in Thailand, with a focus on the tourism industry. Delve into sectoral contributions, labor trends, and core environment metrics to understand the policy implications for sustainable development. Analyze the comprehensive General Equilibrium Model to assess welfare outcomes and environmental considerations. Gain insights into revenue comparisons, tourism statistics, and pollution management strategies for informed decision-making.

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Thai Economy: Growth, Trade, and Environment Impact Analysis

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  1. AAE-875 Growth, trade and the environment in developing countries Anan Wattanakuljarus

  2. Contents • The Overview of Thai Economy • Thai Sectors: GDP, Labor, and Wage • Thai Core Environment Indicators • Thai Tourism Industry • The General Equilibrium Model • Expenditure and Revenue Function • Equilibrium Conditions • Welfare Analysis • The Policy Implications

  3. The Overview of Thai Economy:Thai Sectors

  4. Percentage share of GDP at 1988 prices Source: Office of the National Economic and Social Development Board, Office of the Prime Minister

  5. Tourism revenue share of GDP at current prices Source: Office of the National Economic and Social Development Board, Office of the Prime Minister

  6. Percentage tourism revenue share of GDP at current prices Source: Office of the National Economic and Social Development Board, Office of the Prime Minister

  7. Comparison of revenue from tourism and other major exports: millions baht Source: Ministry of Commerce

  8. Comparison of revenue from tourism and other major exports: millions baht Source: Ministry of Commerce

  9. Percentage of Employed Persons by Industry: 1989 – 2000 Source : Report of the Labor Force Survey : 1989 - 2000, National Statistical Office

  10. Average Wages of Employed Persons by Industry for Whole Kingdom: 1989 – 2000 (*) (*) Relative to the base average wage for the total employed person which is 1 Source : Report of the Labor Force Survey : 1989 - 2000, National Statistical Office

  11. Thai Core Environment Indicators

  12. Thai Core Environment Indicators • Climate • Natural Disasters • Land and Land Use • Forest • Energy • Water • Hazardous Waste and Waste • Water Pollution • Air Pollution • Noise Pollution

  13. Land, Land Use and Forest Source: National Statistical Office, Office of the Prime Minister

  14. Water Source: National Statistical Office, Office of the Prime Minister

  15. Hazardous Waste and Waste Source: National Statistical Office, Office of the Prime Minister

  16. Water Pollution Standard Value DO = Dissolved Oxygen > 2.0 mg./l. BOD = Biochemical Oxygen Demand < 4.0 mg./l. TCB = Total Coliform Bacteria < 20,000 MPN/100 ml. Source: National Statistical Office, Office of the Prime Minister

  17. Air Pollution Source: National Statistical Office, Office of the Prime Minister

  18. Thai Tourism IndustryStatistics of Tourism in Thailand

  19. Number of Tourists 1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  20. Purpose of Visit Thailand (%)1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  21. Reasons of Visit Thailand in Low Season 2001 (%) Note: Tourists answer in order and no more than three reasons Source: The Tourism Authority of Thailand

  22. Occupation of Tourists (%) 1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  23. Tourist Consumption Expenditure 1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  24. Percentage Share of Tourist Expenditure 1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  25. Average Days of Stay in Thailand 1996-2002 Note: Number of tourism excluding overseas Thai. Source: The Tourism Authority of Thailand

  26. Quantity of Accommodations 1997-2001 Accommodations: Hotel, Guest House, Bangalore, Resort, Raft, Apartment, Motel Source: The Tourism Authority of Thailand

  27. What does tourism promotion mean for welfare and environment?

  28. General Equilibrium Model

  29. The General Equilibrium Model EXPORT OR IMPORT RURAL TOURISM URBAN TOURISM PARK NATURE LABOR CAPITAL LAND POLLUTION AGRICULTURE MANUFACTURING RURAL AREA URBAN AREA

  30. r Rural tourism s Urban tourism a Agriculture m Manufacture xi Domestic demand for good i yi Domestic supply of good i pi Price of good i L Labor endowment K Capital endowment l Land endowment, l =1 T Land used in agriculture n Natural Park, (n+T=1) u Aggregate utility level z Pollution emitted from manufacturing t Pollution tax t Tariff Mi Net import of tradable good i Summary of Notation

  31. Summary of Functions • Aggregate Expenditure Function • Total Revenue Function

  32. Aggregate Expenditure Function

  33. Aggregate Expenditure Function (1) • Homogenous of degree one in all prices • Concave in prices • Non-decreasing in prices, utility, pollution emission, and natural park

  34. Aggregate Expenditure Function (2) • Shephard’s lemma, the demand for good i • Output demand is downward sloping • The shadow price of clean environment, or the marginal willingness for consumer to pay to for clean environment

  35. Aggregate Expenditure Function (3) • The shadow price of natural park, or the marginal willingness for consumer to pay to preserve natural park: • Utility function

  36. Total Revenue Function

  37. Total Revenue Function (1) • Homogenous of degree one in all prices • Homogenous of degree one in all factor endowments

  38. Total Revenue Function (2) • Convex in prices • Concave in factor endowments • The supply of good i

  39. Total Revenue Function (3) • Output supply is upward sloping • The quantity of pollution emitted

  40. Total Revenue Function (4) • The wage of factor • Factor demand is downward sloping

  41. Equilibrium Conditions

  42. Equilibrium Conditions (1) • The economy’s budget constraint total expenditure = total revenue [1]

  43. Equilibrium Conditions (2) • Net import of tradable goods [2] to [5] • Good is imported if • Good is exported if

  44. Equilibrium Conditions (3) • Pollution [6] • Land market [7] • Inverse world demand for rural tourism [8] • Inverse world demand for urban tourism [9]

  45. Welfare Analysis

  46. Welfare Analysis (1) • Exogenous variables • are given at world market prices • Endogenous variables • are set by world demand for rural and urban tourism

  47. Welfare Analysis (2) • Total differentiate [1], yield • Rearrange and using [2] to [6], yield [10]

  48. Welfare Analysis (3) • Total differentiate [8], and rearrange, yield [11] [11’]

  49. Welfare Analysis (4) • Similarly, total differentiate [9], yield [12] [12’] • Where, for Proportional change of tourism prices Proportional change of tourism import

  50. Welfare Analysis (5) Own inverse elasticity of world demand for tourism Cross inverse elasticity of world demand for tourism Inverse elasticity of Natural Park to tourism prices Inverse elasticity of pollution to tourism prices

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