Since the 1980s, the Thai economy has gone through rapid economic development.
Despite that, income inequality remained high, if not increasing. While there are
numerous studies on income inequality in Thailand, the geographical dimension of
inequality received far less attention. This study examines income per capita disparities
across provinces in Thailand over the past two decades. It also looks at other relevant
aspects of provincial disparities—labour productivity, government expenditure, social
services and poverty—and how they relate to the income disparities. By utilising the
Barro and Sala-i-Martin model for income convergence, the study investigates factors
contributing to provincial growth as well as the impact of growth on provincial poverty.
Finally, the study took an alternative approach of agglomeration economics to explain
the provincial disparities in Thailand. The findings suggest that GPP per capita
disparities widened over time with no evidence of GPP per capita convergence.
However, when the average income from household surveys is used, there was an
evidence of convergence. This reflects the change in income composition of farm
households by seasonally migrating to work in industrial sector. The analysis on growth
determinants suggested that the widening GPP per capita disparities was mainly due to
the concentration of industrial sector in only few provinces. The agglomeration analysis
further suggested that such concentration of industrial activities generated
agglomeration forces, which induces faster grow in the rich provinces.