Quantifying fair income distribution in Thailand

Abstract

Given a vast concern about high income inequality in Thailand as opposed to empirical findings around the world showing people’s preference for fair income inequality over unfair income equality, it is therefore important to examine whether inequality in income distribution in Thailand over the past three decades is fair, and what fair inequality in income distribution in Thailand should be. To quantitatively measure fair income distribution, this study employs the fairness benchmarks that are derived from the distributions of athletes’ salaries in professional sports which satisfy the concepts of distributive justice and procedural justice, the no-envy principle of fair allocation, and the general consensus or the international norm criterion of a meaningful benchmark. By using the data on quintile income shares and the income Gini index of Thailand from the National Social and Economic Development Council, this study finds that, throughout the period from 1988 to 2021, the Thai income earners in the bottom 20%, the second 20%, and the top 20% receive income shares more than the fair shares whereas those in the third 20% and the fourth 20% receive income shares less than the fair shares. Provided that there are infinite combinations of quintile income shares that can have the same value of income Gini index but only one of them is regarded as fair, this study demonstrates the use of fairness benchmarks as a practical guideline for designing policies with an aim to achieve fair income distribution in Thailand. Moreover, a comparative analysis is conducted by employing the method for estimating optimal (fair) income distribution representing feasible income equality in order to provide an alternative recommendation on what optimal (fair) income distribution characterizing feasible income equality in Thailand should be.