Resource Misallocation and Rice Productivity in Thailand
Thailand’s manufacturing sector is characterised by considerable resource misallocation compared with this sector in other countries, and the problem may extend to its agricultural sector as well. Using detailed household-level data on rice production from the 2013 Agricultural Census, this pape...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
NGO “Economic Laboratory for Transition Research” (ELIT)
2018-06-01
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| Series: | Montenegrin Journal of Economics |
| Subjects: | |
| Online Access: | http://www.mnje.com/sites/mnje.com/files/143-153_-siwapong_dheera.pdf |
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| Summary: | Thailand’s manufacturing sector is characterised by considerable
resource misallocation compared with this sector in other countries,
and the problem may extend to its agricultural sector as well. Using
detailed household-level data on rice production from the 2013
Agricultural Census, this paper examines resource misallocation
across farms in Thailand and its effect on the country’s aggregate
productivity in rice farming. I find that the marginal products of land
and capital were largely dispersed, which is an indication of significant
resource misallocation. I further estimate that reallocation of
resources could increase aggregate output and productivity by
approximately a factor of 1.67. This potential gain is not small, but it
is smaller than that predicted in other studies for the Thai manufacturing
sector and the Malawian agricultural sector, a result suggesting
that the Thai rice farming sector is relatively less plagued by
resource misallocation. Other developing countries may encounter
similar degrees of misallocation in their agricultural sectors. I also
find that an effective reallocation policy cannot involve simply reducing
the landholdings of large landholders but rather supports highproductivity
farmers to have more land and capital. |
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| ISSN: | 1800-5845 1800-6698 |