Structural path analysis of the Thai economy focusing on land rent

Abstract This study investigates the economy-wide effect of land rent in Thailand, addressing a gap in the literature by focusing on the distribution of land rent income across different household groups. Using a Social Accounting Matrix that disaggregates land rent from capital return, the study applies Structural Path Analysis to trace the effects of sectoral growth in the five sectors with the highest land rent on household incomes. Results reveal considerable disparities in income distribution, with land rent income heavily concentrated among the richest households. The study further evaluates the potential of redistributive policies to mitigate these inequalities through a multiplier model. Two counterfactual scenarios are explored, reallocating 10% and 25% of land rent income from the richest households to poorer households. Findings suggest that redistributing land rent income can significantly reduce income inequality. These results offer valuable policy insights, emphasizing the need for targeted land rent redistributive measures to promote equitable economic growth in Thailand.