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Faculty of Economics

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Liu, K., Prommawin, B., Schroyen, F.

Health Insurance and Agricultural Investments: Evidence from Rural Thailand


Abstract: Exploiting the 2001 universal health insurance reform in Thailand as a source of identification, we estimate the effects of health insurance coverage on agricultural production decisions and welfare. Our estimates suggest that the reform led to long-run increases in total cultivation investments and output, and that households shifted their cultivation portfolio towards riskier crops. We explain these findings using a model of agricultural investment, highlighting the important roles of health insurance in terms of mitigating background medical expenditure risk and improving health. We also find that the reform improved households’ welfare by reducing debts and defaults on loans.

Keywords: Health insurance, Risk-taking, Cultivation, Investments.

JEL Codes: D1 G5 H51 I13 Q12

Author links: Kai Liu  Benjapon Prommawin  


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