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The Economic Impacts of Extreme Rainfall Events on Farming Households: Evidence from Thailand

Author

Listed:
  • Sirikarn Lertamphainont

    (Ministry of Agriculture and Cooperatives)

  • Robert Sparrow

    (Australian National University)

Abstract

We investigate how rainfall shocks, in terms of floods and droughts, affect income, consumption, and coping responses of farming households in Thailand. We draw on a province pseudo-panel, combining household-level information from repeated cross-sectional farm household surveys over the period of 2006-2010 and provincial-based measures of annual rainfall shocks. These rainfall shock variables are constructed from high frequency rainfall time series, identifying the incidence of excessive and deficit rainfall events. We find that crop income falls sharply as a results of rainfall shocks, while there is evidence of income smoothing through asset transactions and off-farm employment in response to excessive rainfall but not deficit rainfall. This suggests that deficit rainfall events are more difficult to insure against as droughts not only reduce crop income but also limit households' opportunities to smooth income. On average, households seem to be able to smooth their consumption when affected by floods or droughts, although we do see a reduction in spending on luxury and miscellaneous items in case of droughts in order to maintain necessary consumption. Dissaving and asset sales are prevalent strategies for consumption smoothing. Finally, our findings emphasise wealth-differentiated effects of rainfall shocks as landless households seem more vulnerable to rainfall shocks than landholding households due to their limited ability to smooth income and consumption.

Suggested Citation

  • Sirikarn Lertamphainont & Robert Sparrow, 2016. "The Economic Impacts of Extreme Rainfall Events on Farming Households: Evidence from Thailand," PIER Discussion Papers 45, Puey Ungphakorn Institute for Economic Research, revised Oct 2016.
  • Handle: RePEc:pui:dpaper:45
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    References listed on IDEAS

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    Cited by:

    1. Zhuldyz Ashikbayeva & Marei Fürstenberg & Timo Kapelari & Albert Pierres & Stephan Thies, 2020. "Household level effects of flooding: Evidence from Thailand," TVSEP Working Papers wp-022, Leibniz Universitaet Hannover, Institute of Development and Agricultural Economics, Project TVSEP.

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    More about this item

    Keywords

    Natural disasters; Extreme rainfall; Income shocks; Consumption smoothing; Coping strategies; Thailand;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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