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

Andreas Wagener and Juliane Zenker

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

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.

Keywords: Income support; farm households; risk attitude; investment; Thailand (search for similar items in EconPapers)
JEL-codes: D13 H25 I38 Q12 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2015-09
New Economics Papers: this item is included in nep-pbe and nep-sea
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