The Distributional Impacts of Climatic Variability on Welfare in Thailand

Overview & Synopsis

This paper uses cross-sectional surveys of households over 2007–21 from Thailand’s Socio-Economic Expenditure Survey to conduct one of the first investigations of the impacts of climatic variability on two key statistics characterizing the distribution of welfare in Thailand: the mean and the variance (or inequality). It shows that historically higher rainfall is positively associated with the mean level of welfare, as measured by household consumption expenditures per capita, and negatively associated with poverty and a variety of measures of inequality in the country. These results validate concerns about the impacts of increased climatic variability and more frequent and intense weather extremes associated with the process of climate change. More frequent and more intense shortages of rainfall will decrease welfare and increase inequality at the national level and in both urban and rural areas. There is considerable variation in the extent to which access to social assistance and credit programs in their current configuration mitigates the negative impacts of rainfall shortages on welfare and prevents increases in inequality. Investing in irrigation infrastructure and strengthening the insurance components of social protection and credit support programs, such as the Village Funds program, through increasing the identification, targeting, and coverage of those vulnerable to poverty from exposure to such shocks, provide promising options for mitigating the impacts of climatic variability on welfare, poverty, and overall inequality in Thailand.