ASSESSING THE ECONOMIC IMPACT OF NON-COMMUNICABLE DISEASES IN THAILAND AND ITS IMPLICATIONS FOR THE UNIVERSAL COVERAGE SCHEME: A HUMAN CAPITAL AUGMENTED SOLOW GROWTH MODEL

Abstract

This study investigates the economic impact of non-communicable diseases (NCDs) on Thailand's economy from 1995 to 2022, using the Solow growth model with human capital. The analysis focuses on two main arguments in production function: the adverse effect of NCDs through human capital (morbidity and mortality) and physical capital (public health expenditure). The extent of the impact is evaluated by comparing the transition path of the economy in two scenarios - a counterfactual one in which NCDs are eradicated and a business-as-usual alternative in which NCDs continue to affect the economy. The results are that average Real GDP growth reduced by 0.1201 percentage points compared to the counterfactual scenario. Specifically, in 2022, Real GDP declines from 1.8772 trillion United States dollars (USD; at constant 2017 prices) in the counterfactual scenario to 1.7649 trillion USD in the business-as-usual scenario. This represents a reduction of 9.1363 percentage points in Real GDP for 2019, equivalent to a decrement of 0.1123 trillion USD. This study also explores a universal coverage scheme (UCS) in the business-as-usual context by comparing two scenarios: one with, and another without, UCS implementation. These findings demonstrate a positive impact on the economy, with an observed increase in average Real GDP ranging from 0 to 2.3707 percentage points between 1995 and 2022, compared to the scenario without UCS.