The paper explores the potential of Khao Dawk Mali expansion in Northern Thailand as well as presents estimation of demand for variable inputs and choice of rice varieties as jointly determined by the profit-maximizing farmers. Results reveal that, Khao Dawk Mali provides economic advantage over glutinous varieties and can be conceived as a better alternative crop particularly in areas with inadequate irrigation and water control facilities. Consideration of the possibility of rice variety switching, that is, allowing the movement along a meta-production function, improved the elasticity estimates. A two-stage switching regression procedure which adjusts for selectivity bias is used to estimate the model. From the viewpoint of both cost-effectiveness and distributional consideration, price policies for raising rice yields and farm income in Chiang Mai province should focus on rice prices and tractor power prices.


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