Impacts of tertiary canal irrigation:Impact evaluation of an infrastructure project

Discussion Papers

No.596

by Seiro Ito , Satoshi Ohira, Kazunari Tsukada

April 2016

ABSTRACT

We estimate the economic impacts of irrigation using the panel data set from rural Thailand. We employed difference-in-differences estimation and showed that tertiary irrigation has unexpected impacts. Contrary to the local experts predicitions that it should have substantial productivity impacts as it allows better water controls for farmers, we found largely zero profitability impacts. Another unexpected finding is that, while profitability is not affected, we see an increase in cultivation probability with the construction of tertiary canals. This is observed in both wet and dry seasons. This finding suggests that Thai farmers are willing to expand operation scale once they get water.

Keywords: impact evaluation of infrastructure, tertiary canals, cultivation
JEL classification: Q12, Q15

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