Assessing the impact of climate change on the agricultural economy in Thailand: an empirical study using panel data analysis

Abstract

This study estimates the impact of climate change on the economic growth of the agricultural sector and its variability using a panel dataset from 1995 to 2019 for 76 provinces in Thailand. The panel data analysis consists of unit root tests for identifying stationary characteristics, autoregressive distributed lag (ARDL) bounds for analyzing cointegration, and pool mean group (PMG) estimation for detecting long-run and short-run effects. The cointegration results indicate the existence of long-run equilibrium in the agricultural economy and its variability to climatic and non-climatic variables. Results from the PMG estimation suggest that extreme weather events have a negative impact on the agricultural economy, but increased total rainfall has a positive association with the agricultural economy. The increases in mean average and mean minimum temperatures will reduce the variability of agricultural growth. The obtained results suggest that the productivity of agricultural households and water resources increases the agricultural revenue and reduces its variability for long-term development in the agricultural sector of Thailand.