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Agricultural Productivity Growth and Poverty Reduction: Evidence from Thailand

Peter Warr () and Waleerat Suphannachart

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Raising agricultural productivity in developing countries is often said to reduce poverty, though the empirical evidence is more nuanced. Productivity growth generates additional income and must benefit someone, though not necessarily the poor. It is conceivable that most, or even all of the benefits go to others. Using region-level data from Thailand, we study the relationship between agricultural productivity growth and rural poverty incidence. Our dependent variable is the annual rate of change in rural poverty incidence at the regional level between the years for which poverty data are available. Agricultural productivity is measured as the annual rate of change in regional agricultural productivity, covering the same time intervals as the poverty observations, but lagged one calendar year. Other control variables include regional nonagricultural incomes and the real price of food. The estimated coefficient on the change in agricultural productivity is negative and highly significant, implying that agricultural productivity growth does reduce rural poverty, holding other variables constant. Nevertheless, the poverty-reducing contribution of recent productivity growth is small. The poverty-reducing effects of long-term drivers of agricultural productivity growth are also studied using simulations based on the estimated model.

Keywords: Agricultural productivity; Poverty incidence; Thailand (search for similar items in EconPapers)
JEL-codes: I32 O13 O15 Q01 Q18 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2020
New Economics Papers: this item is included in nep-agr, nep-dev, nep-eff and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2020-24

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