Economic analysis of land rent: a case study of Thailand using social accounting matrix (SAM) and computable general equilibrium (CGE) model

This dissertation analyzes the economic role of land rent and its implications for income inequality in Thailand. Despite persistent issues of unequal land ownership, the distinct contribution of land rent to economic disparities has rarely been examined. This study addresses this gap by constructing a Social Accounting Matrix (SAM) that disaggregates land rent from capital returns, applying Structural Path Analysis (SPA), the SAM-based Multiplier Model, and a Computable General Equilibrium (CGE) model to assess how land rent income is distributed among households, how sectoral growth reinforces inequality, and how redistributive policies can mitigate disparities. In Chapter 2, this dissertation constructed SAM for Thailand that disaggregates land rent from capital return in order to address a major gap in previous literatures. The results revealed that land rent income is significantly more concentrated than labor and capital income. This finding underscores the role of land as a major driver of economic inequality and highlights the need for a distinct consideration of land rent in economic analysis and policy design. Based on the constructed SAM and SPA to measure the effects of sectoral growth in five sectors with land rent on household incomes, in Chapter 3, this study investigated the effect of land rent on income inequality in Thailand. Considerable disparities were observed in income distribution and land rent income, which were heavily concentrated among the richest households. This chapter also evaluated redistributive policies using multiplier model. the results show that redistribution of land rent income has potential measures for mitigating inequality. Chapter 4 evaluated the economy-wide impacts of land redistribution policies in Thailand using a static CGE model built on the constructed SAM that explicitly disaggregates land rent from capital returns. This chapter simulated three scenarios: (1) a tax on land income from the richest households, (2) land tenure reform under a willing-buyer, willing-seller framework with government compensation, and (3) redistribution of unused state-owned land to poorer households. All scenarios reduce income inequality, with Scenarios 1 and 3 achieving the most significant reductions in the income ratio and Gini coefficient. Scenario 3 also yields the highest gains in agricultural output and real GDP. Scenario 2 has a weaker redistributive effect due to fiscal compensation to the richest landowners. This chapter also contributed to the literature by modeling land as a distinct factor of production and provides relevant policy insights for addressing structural inequality in Thailand. The study highlights the critical role of land rent in structural inequality and provides valuable guidance for policies aimed at promoting equitable and sustainable economic growth in Thailand.