Urbanization and income inequality in Thailand

This study aims to explore the correlation between urbanization and income inequality in Thailand, covering the timeframe from 2002 to 2020. It draws on data from 76 provinces and 77 provinces, obtained from Thailand’s Labor Force Survey (LFS), along with geospatial data sourced from the U.S. Air Force Defense Meteorological Satellite Program (DMSP) and the Visible Infrared Imaging Radiometer Suite Day/Night band (VIIRS-DNB) satellite over nineteen specific years.The paper uses two distinct urban area definitions: one established byThailand’s Labor Force Survey (LFS) and the other determined via nighttime light data from the DMSP and VIIRS-DNB satellite. The latter method has two sub-classifications: the calculation of urban areas based on nighttime light density derived from population densities of 300 and 1,500 individuals per square kilometer.Employing empirical analyses involving Ordinary Least Squares (OLS) and fixed effects, alongside random effects models, the study consistently reveals a U-shaped relationship between income inequality and urbanization. The econometric results illustrate that urbanization or population density notably and inversely affects income inequality. Additionally, the square of urbanization exhibits a statistically significant positive influence on income inequality. Furthermore, a negative connection is observed between logarithmically transformed income and income inequality.This research advocates for the integration of satellite imagery, geospatial data, and spatial econometric methodologies in subsequent studies to enable quantitative analysis of spatial relationships.