Stochastic Transfers, Risky Investment and Incomes: Evidence from an Income Guarantee Program in Thailand
Autor: Andreas Wagener and Juliane Zenker
Nummer: 562, Sep 2015, pp. 32
JEL-Class: D13, H25, I38, Q12
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.
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