Linear Approximate Almost Ideal Demand System for Thai Agricultural Products in ASEAN Countries

Since the formal establishment of ASEAN Economic Community (AEC) in December 2015, ASEAN has become high-potential export market for the Thai agricultural products. This research question is whether and to what extent the demand of Thai agricultural products in ASEAN market is sensitive to price and income change. Based on the approximation of AIDS model by applying SUR method, it suggested that during 2013-2016, Rice (HS Code 1006) and Meat (HS Code 0207) in Malaysian market had high price sensitivity. Therefore, price strategy is still significant for this market in view of market expansion. On the contrary, those products in Singaporean market and Milk (HS Code 0401) in Filipino market were unlikely sensitive to price change. Product quality improvement should be more significant than price strategy in these markets. In addition, Indonesian, Filipino and Singaporean viewed Thai rice as normal goods with rather high income elasticity of demand. This behavior was similar to that of the consumer's view in Malaysian market toward Fruit (HS Code 2008) and Fish (HS Code 0302) which implicitly suggested that economic expansion in these countries would be the opportunity for export market growth of such Thai agricultural products.