Income inequality among agricultural households in Thailand

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Chatchawan Paopeng


Poverty and income inequality are still essential problems faced by Thai agricultural households. This study aims to investigate income inequality among agricultural households in Thailand, as well as factors affecting this inequality by using regression-based decomposition (RBD) approach. The results demonstrate that, among agricultural households, the central region has the highest income inequality; however, the region’s average income is also high. On the contrary, the northeast region has the lowest income inequality, but its average income is less than the nation’s. Further, the average income of the poorest 20% of the households is the lowest in the north. When decomposing the inequality by income source, increasing transfers and agricultural subsidies would reduce income inequality, while off-farm and non-farm income differently affect the inequality regarding the regions. Lastly, the results of RBD indicate that the crucial factors explaining the inequality consist of operated land sizes, household head’s education, access to agricultural equipment and machinery, access to agricultural credit, and land ownership. These findings have significant implications for inequality. Poor agricultural households in the northern and northeast regions should be considered as the priority for assistance by improving productivity of smallholder farmers, promoting access to appropriate technologies through providing credit and subsidies as well as capacity building towards modern farming.

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