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Stochastic Transfers, Risky Investment and Incomes: Evidence from an Income Guarantee Program in Thailand

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  • Wagener, Andreas
  • Zenker, Juliane

Abstract

From 2009 to 2011, the Thai government implemented an income guarantee program for rice, tapioca and maize farmers. Essentially, this program added a non-negative but stochastic component to the incomes of registered farmers. We evaluate the impact of the program on risk attitudes and investment behavior of small-scale rice farmers in relatively poor North-eastern Thailand. To control for self-selection into the scheme, we use propensity score matching. We find that that participation in the program significantly makes farmers less risk-averse, induces higher investments and boosts incomes. Medium-term effects are stronger than short-term effects.

Suggested Citation

  • Wagener, Andreas & Zenker, Juliane, 2015. "Stochastic Transfers, Risky Investment and Incomes: Evidence from an Income Guarantee Program in Thailand," Hannover Economic Papers (HEP) dp-562, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-562
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    More about this item

    Keywords

    Income support; farm households; risk attitude; investment; Thailand;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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