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The Unequal Effects of the Great Depression on Rural Households in Siam, 1930 – 1934:

Crisis Transmission through International Rice Trade

Thanyaporn Chankrajang

Faculty of Economics, Chulalongkorn University

September 2017

Abstract:

The paper assesses the differential impacts of the Great Depression on different types of

households in rural Siam. Based on the first two rural household economic surveys conducted in

the country, it empirically exploits the exogenous variation in the pattern of rice cultivation and

commercialisation across provinces before and after Siam was fully hit by the Great Depression.

Robust to different specifications and measures of the exposure to international trade, it is found

that the Great Depression, through international rice trade, significantly affected households that

cultivated rice for trade more heavily than subsistence households, in terms of income,

expenditure, farm investment, and real debts. The findings show that globalisation in particular the

exposure to international trade, even for a small agricultural country in the periphery, had been

translated into the exposure to the reduction in household economic conditions during the time of

the global crisis.

Keywords: Economic history, Gold Standard, Great Depression, International trade, Rural

households, Siam

JEL Classification Codes: G01, N25, N75, O53

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1. Introduction

The Great Depression has been viewed as one of the major economic crises during the past

century. It is agreed that its impact was profound, widespread, deep and long -- not only on the

financial and monetary sectors, but also on the households’ socio-economic conditions. The extent

and depth of the depression was further illustrated by the collapse of primary product prices

(Lewis, 1949), and this extended the damage to developing countries that exported primary

commodities to the United States, Europe and other related developing countries, which

experienced a contraction of demand. Nevertheless, while quantitative studies of the effect of the

Great Depression in the West and at the macro level, in particular concerning the monetary context

and the financial sector, have been substantive, little has been studied empirically in the context of

developing countries and at a more micro level. Such study, although very important in completing

the picture of the widespread impact of the Great Depression and its complexity (Bernanke, 1993;

Eichengreen 1988), could be constrained by the availability of historical data.

Likewise, the world has observed the synchronisation of economic downturns across

countries both in the present-day context and historically. Theories and empirical works have been

devoted to the study of the transmission mechanism of global economic crises, and international

trade has emerged as one of the main transmission channels. Nonetheless, with the exception of

Forbes (2004) and Claessen et al. (2011) that use firm-level data, the empirical evidence of the

significance of international trade in transmitting crises, based on macro aggregated data, has been

mixed, possibly due to potential identification problems. As trade integration and financial

integration are highly correlated, macro-level evidence can hardly cleanly identify these two

important channels from each other.

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By using a rare statistical account of rural household economic conditions in Siam, this

paper contributes to the literature that is dominated by the macro-level monetary and financial

evidence from developed countries by (i) empirically analysing the causal impacts of the Great

Depression in a developing country and elucidating the complexity of its impact -- even within the

same country, and (ii) empirically establishing a clean causal evidence of international trade as a

transmission channel. The validity of such contributions is based upon the following identification

strategies.

Firstly, Siam, in the 1930s, offers an ideal setup for an empirical test for the effect of the

Great Depression on households’ economic conditions, as unlike the central countries of the crisis,

the depression was entirely exogenous to Siam and its households’ economic behaviours.

Secondly, Siam, in the 1930s, was to a large extent free from international financial integration.

Although it could be argued that the Siamese, in particular commercialised rice cultivators in the

central provinces, relied on credit from the Chinese merchants and millers, the sources of the

Chinese’ funds were in fact from within the country. According to Skinner (1957), capital was

from Chinese-held revenue farms, profits from rice retailing and distributions, and borrowings

from members of the Thai elite. This enables the analysis to disentangle international trade from

financial linkages, and to claim that any effect found is more likely to be the result of the

transmission through international trade. Lastly and most importantly, based on the more micro-

level data, the paper can categorise provinces/households according to their exogenous exposure

to international trade. If it is found that the Great Depression had significantly larger impacts upon

provinces/households that were more exposed to international trade, it can thus be concluded that

international trade potentially acted as a transmission channel.

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The paper also challenges a general claim in the literature that unlike the Burmese

counterpart and other countries in the region, the impact of the Great Depression on the Siamese

farmers was relatively mild, as they were occupied with subsistence farming and produced

essential items such as food and clothes themselves (Andrews, 1935; Manarungson, 2000; and

Zimmerman, 1931), barely relied on the external sources of capital, which sharply contracted

during the depression (Boomgaard and Brown, 2000, p.3), and were not subject to the colonial

administrations’ sharp rise in rural taxation as a part of the administrations’ attempt to ensure

against a fall in the colonial tax revenue (Boomgaard and Brown, 2000, p.6).

On the contrary, the paper finds significant impacts of the Great Depression on the Siamese

rural households. As a result of the Great Depression, average income and expenditure

substantially dropped. More importantly, the paper shows that due to differential exposures to

international rice trade, which acted as a global crisis transmitter, the Great Depression projected

significant differential impacts onto different types of households. In particular, under the Great

Depression, households in the central region that grew rice for commercialised and export purpose

experienced a greater fall in their (i) total income, (ii) rice income, (iii) overall expenditure, and

(iv) expenditure on farm representing farm investment, in comparison to subsistence households.

In addition, the Great Depression is found to unequally and significantly increase (v) real debts

and (vi) real debt-to-income ratio of the households that engaged in international rice trade.

Given that Siam was a small country in the periphery with undeveloped financial market

and monetary system, and limited credit from abroad, the significance and the sheer size of the

results found in the empirical part is striking. The only channel that linked Siam to the world

economy that experienced an economic turmoil during that time was international trade. Even so,

trade accounted for only a fraction of the Siamese overall GDP. My own calculation (see, the

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appendix for the derivation) suggests that the degree of openness of Siam during 1929 was only

about 14.66%. This is substantially small in comparison to the today’s measures. Yet, the major

finding of the paper elucidates that the existing unequal effects of the Great Depression on different

types of rural households in Siam was deeply rooted in their differential exposure to international

trade. By being more exposed to rice commercialisation and exports, and hence the slump in the

rice price, households in the central region were more severely hit by the Great Depression. As

such, not only do the results illustrate the complexity of the impacts of the Great Depression, they

also shed light on the importance of the international trade as the international crisis transmitter –

the crisis contagion channel that is relatively harder to empirically test in today’s setups.

The rest of the paper is organised as follows. Section 2 covers the background of the

Siamese rice exports, the expansion of rice cultivation in the central plain, as well as its relation to

the Great Depression. Section 3 and 4 explain the data and the empirical specifications used in the

paper. Section 5 illustrates and discusses the empirical results. Section 6 covers the robustness

checks of the baseline results. Section 7 discusses and concludes.

2. Background

2.1 Rice exports and the expansion of rice cultivation in the central plain

Prior to 1855, although rice had been produced in immense quantities in the river delta and

flood plain of central Siam and its quality had been pronounced superior to the rice of Manilla,

Java, Bengal, Cochin, and China, all exhibited at the same time, the exportation of Siamese rice

was virtually prohibited (Bowring, 1857). It was recorded that in 1849, there was only 200,000

piculs1 of rice exported to China, which was equivalent to merely 2% of all Siamese export values

1 A picul was about 133 pounds (Zimmerman, 1931).

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(Malloch, 1852). The 1855 Bowring Treaty between Siam and Britain and the subsequent treaties

with other countries resulted in the abolition of the international trade monopoly of the central

government and the liberalisation of the Siamese international trade. It was claimed to have led to

unprecedented growth in rice cultivation and rice exports from Siam. In his book (Bowring, 1857),

Sir John Bowring himself singled out the expansion of rice cultivation and exports as the main

benefit of the treaty.

The removal of the prohibition on the export of rice is one of the great benefits

conferred by the late treaty. It is now allowed to leave the country, unless a royal

ordinance shall proclaim the existence of a dearth; but as already the prospect of

large foreign demands is extending the field of cultivation, free trade in this all-

important article will certainly give more security against the visitations of famine

than could ever hope for from any restriction upon its exportation (Bowring,

1857, p. 203).

Indeed, as recorded by the British Consulate (1889) in Table 1, for the period of 35 years

after the agreement, the Siamese rice exports had significantly and consistently grown -- more than

five times (Suebwattana, 1984). In an alternative record, it was observed that rice exports had

grown from 1,830,000 to 2,580,000 piculs and the value of rice exports had increased from

3,510,000 to 6,520,000 baht from 1867 to 1870 (Bunnag et al., 1982). Instead of producing only

enough rice for household consumption as in the past, Siamese farmers turned more and more

towards commercialised rice cultivation with a large surplus for exports (Zimmerman, 1931).

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Table 1: Rice exports as recorded by the British Consulate

(1889)

Periods Exports in piculs

1857 – 1860 1,169,000 1861 – 1865 1,965,000 1866 – 1870 2,144,000 1871 – 1875 2,110,000 1876 – 1880 3,413,000 1881 – 1885 3,558,000 1886 – 1890 6,167,000

Source: Suebwattana (1984) - a reproduction of the table.

However, commercialised rice cultivation was found to be only limited to the central region

due to its comparative advantage based on geographical and weather factors, and the ease of

transport and communication aided by networks of rivers and canals and its close proximity to

international ports in Bangkok (Andrews, 1935; Manarungson, 2000; and Zimmerman, 1931). The

central region was equipped with vast tracts of cultivable land, regular inundation of rivers, and

high quality of soils with nutrition from the annual inundation (Manarungson, 2000). Moreover,

new inundation canals were also dug under the government projects to increase frontier land for

rice farming during the reigns of King Rama IV (1851 – 1868) and King Rama V (1868-1910)2. It

was claimed that as a result, 1,314,005 rai of arable land suitable for rice cultivation was expanded

(Tanthai, 1984). It was estimated in 1917 that in Bangkok, Thonburi, Nakorn Chaisri, and

Prajinburi -- all of which were in the central plain -- land devoted to paddy fields amounted to

6,745,000 rai by the end of the reign (Suebwattana, 1984).

2 For example, Jedi Bucha and Mahasawas canals, constructed in 1858 and 1860 to connect the

Chao Phraya River to the Tachin River in the west, had opened up new land that was suitable as

paddy fields for approximately 63,490 rai2 (Suebwattana, 1984). During the reign of King Rama

V, 15 canals, most notably the Rangsit canal on the east of Bangkok, were dug between 1870 and

1904.

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Besides the pattern of land use, the indication of intensive and commercialised rice farming

in the central plain is further illustrated by the influx of labour and cattle into the region. It was

recorded that there was seasonal labour migration from the northeast to the central provinces, in

particular to the Rangsit area, which bordered Bangkok on the east. The workers came during the

month of April and migrated back to the northeast in January or February of the next year when

the rice farming season ended. In 1905, in the Rangsit area alone, seasonal labour amounted to

5,068 persons (Suebwattana, 1984). Furthermore, the central region also experienced the

immigration of water buffaloes. Water buffaloes were essential in rice cultivation3. Due to a high

demand, the central provinces were short of water buffalo supply and in need of buffalo imports

from other regions. In 1895 alone, 7,000 to 8,000 buffaloes were transported from the northeast to

the central plain by train (Suebwattana, 1984). For those who could not afford to own one, there

were buffaloes for rent4.

By the 1930s when rice accounted for about 63% of the Siamese overall exports, the

contrast between subsistence farms outside the central plain and commercialsed farms in the

central plain was stark. While farms in the central region ranged mostly from 30 to 200 rai, those

outside ranged only from one to 20 rai (Zimmerman, 1931). Not only greater in size, the

intensively cultivated centre also derived about three times as much from the soil as it puts into it

compared to other regions (Andrews, 1935). The difference can be further illustrated by the

differential in the shares of income from rice out of the total income. From the first two rural

3 It is estimated that a water buffalo can work for five hours or plow a one-rai plot a day

(Sriboonchitta, 1975). 4 In the Rangsit area, the rental rate was at 37.50 baht per annum, while in the Phasri Charoen area

on the western side of the Chao Phraya River, a buffalo was rented at the rate 30 baht per year.

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household economic surveys (Zimmerman, 1931; Andrews, 1935), it can be calculated that while

on average 46.77% of the income of the households in the central plain came from rice, only

15.82% of the income was from rice for the households outside the central region during the first

half of the 1930s. Furthermore, in 1930/1931, on average 37.93% of rice produced was kept for

home consumption in the central area, whereas for the rest of the country on average as much as

72.24% of rice produced was kept. This clearly helps illustrate the differential exposure to trade

between households in the two regions.

2.2 The Great Depression and the Siamese international rice trade

Even though Siam did not directly trade with the countries that were at the centre of and

worst hit by the Great Depression such as the USA and the European countries, rice was traded

heavily with the British colonies. From Table 2, the main recipients of the Siamese rice exports

had always been Hong Kong and Singapore5. This essentially acted as a channel through which

the Great Depression in the West was transmitted to Siam. In particular, the two most important

international trade mechanisms through which the depression contributed to a sharp slump in the

prices of Siamese rice were (i) a sharp decline in the international demand for the commodity, and

(ii) the exchange rate system, more specifically the Gold Standard (Temin, 1993; Manarungson,

2000).

As the world market slumped, to assist Burma -- then the world largest rice exporter, the

British Empire, in particular Hong Kong, India, Malay and Singapore, imposed a restriction on

rice imports from countries outside the Empire, including Siam (Ministry of Foreign Affairs, 1932

- 1934). In accordance, although during the period from 1934 to 1935 Siamese rice accounted for

5 Singapore, here, also covered the British Malaya.

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around 65% of the total rice imported into Malaya, the British Malaya raised import duties on

Siamese rice. It was taxed at 25 cents per picul, while the Burmese counterpart was only taxed at

15 cents (Ministry of Foreign Affairs, 1935). Moreover, the rate for rice shipments from Bangkok

to Singapore was relatively more expensive (Ministry of Agriculture, 1931). As the Asian

countries in the British Empire constituted the main importers of Siamese rice (see, Table 2), facing

such barriers and higher transaction costs, the price of Siamese rice became artificially high and

less competitive. This potentially led to lower international demand for Siamese rice during the

Great Depression. For instance, from Table 2, the value of rice exports to the top destinations

started to significantly fall around 1931.

In addition, to protect their own producers, countries outside the British Empire

also took measures to reduce imports of rice from Siam (Manarungson, 2000). Japan, one of the

major Siamese rice importers, experiencing rice overproduction within its country, informed Siam

in 1929 that the country found it necessary to curtail rice imports from Siam (Ministry of Foreign

Affairs, 1929). As the sugar planters in Java converted to rice cultivation for their own

consumption, Indonesia banned all rice imports except where specific official approval

commanded (Ministry of Agriculture, 1931). As each country sought to protect its own farmers,

the world rice market was notably thin during the Great Depression. Of all 88 million tons of the

annual world rice production in total, only about seven million tons (approximately 7.5%) was

internationally traded annually (Manarungson, 2000). Such limited world rice market further

contributed to the slump in its price.

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Table 2: Siamese rice exports - Countries of destination, their % shares and values (baht)

Period Ranking

1 2 3

Country % Value (baht) Country % Value (baht) Country % Value (baht)

1920-21 Hong Kong 69.08 20,015,529 Singapore 13.34 3,866,009 United Kingdom 8.56 2,478,737

1921-22 Singapore 32.39 44,777,204 Hong Kong 24.05 33,242,114 Port Said (for orders) 13.39 18,511,260

1922-23 Hong Kong 46.73 58,927,147 Singapore 33.19 41,854,646 India, Netherlands 5.59 7,053,091

1923-24 Hong Kong 50.54 71,004,545 Singapore 31.16 43,784,409 India, British 3.99 5,606,618

1924-25 Hong Kong 40.11 54,095,155 Singapore 33.20 44,777,674 West Indies 5.38 7,251,801

1925-26 Singapore 34.74 58,151,884 Hong Kong 26.71 44,707,271 China 7.19 12,038,103

1926-27 Singapore 43.80 72,364,836 Hong Kong 19.50 32,223,651 China 8.08 13,354,225

1927-28 Singapore 40.83 82,133,188 Hong Kong 30.91 62,184,201 Japan 5.86 11,781,089

1928-29 Singapore 42.67 74,718,247 Hong Kong 30.26 52,996,574 West Indies 6.98 12,222,331

1929-30 Singapore 45.51 63,302,975 Hong Kong 21.12 29,373,955 Japan 10.34 14,387,167

1930-31 Singapore 44.00 45,351,984 Hong Kong 23.61 24,331,127 West Indies 9.50 9,788,440

1931-32 Hong Kong 32.00 24,800,586 Singapore 31.48 24,394,929 Japan 9.20 7,130,810

1932-33 Hong Kong 37.82 35,630,393 Singapore 25.39 23,917,084 Japan 8.84 8,324,764

1933-34 Hong Kong 37.84 31,392,221 Singapore 26.31 21,827,048 Others 13.62 988,586

1934-35 Singapore 26.93 26,506,835 Hong Kong 25.44 25,044,820 India, British 13.97 14,990,518

1935-36 Singapore 35.12 31,902,774 Hong Kong 20.79 18,887,606 West Indies 12.83 11,654,815

1936-37 Singapore 35.88 34,424,913 Hong Kong 19.48 18,689,478 West Indies 15.74 15,102,519

1937-38 Singapore 49.53 37,313,933 Hong Kong 21.26 16,019,535 West Indies 5.91 4,453,697

1938-39 Singapore 43.00 41,886,570 Hong Kong 18.08 17,617,172 West Indies 6.61 6,441,823

Source: Own compilation from the Statistical Year Books.

Note: Singapore, here, also covers the British Malaya. It was highly possible that Singapore and Hong Kong were the final destinations

as well as acted as entrepots that re-exported Siamese rice.

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The contraction in the international demand for Siamese rice was, moreover, exacerbated

by its superior quality (Manarungson, 2000). As the purchasing power of the consumer countries

declined during the depression, more expensive Thai rice with higher quality lost its

competitiveness. People switched to lower quality and inexpensive rice. For example, as the

British Malaya faced a decline in tin and rubber prices during the 1930s, it started to import cheaper

rice from Vietnam, which although its quality was lower came with a more affordable price

(Ministry of Agriculture, 1931).

Secondly and most notably, the exchange rate system during the Great Depression, was, to

a large extent, responsible for a sharp fall in Siamese rice price. The Siamese experience is in line

with studies such as Bernake (1993), Choudhri and Kochin (1980), Eichengreen (1988),

Eichengreen and Sachs (1985), Eichengreen and Sachs (1986), and Temin (1993), which highlight

the role of the Gold Standard in transmitting the effects of the Great Depression. The literature

shows that the Gold Standard was a key factor that initiated, deepened and spread the Great

Depression.

To restore the stability of the exchange rate and facilitate rice trade after World War I and

the Great Siamese Flood in 1919, since 1923 the Siamese government had tried to link the baht

back with gold at the fixed rate of pound sterling. This culminated in the 1928 legislation that the

government had a liability to keep the baht linked with gold at the rate of 11 baht per pound,

equivalent to 0.66567 grammes of fine gold (Statistical Year Book, 1934-35). However, Britain’s

abandonment of the Gold Standard in September 1931 led to a sudden appreciation of the baht

(see Table 3 and Figure 1) and hence severely damaged Siamese rice exports (Manarungson,

2000).

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Siam’s major trading partners constituted those of the British colonies (see, Table 2); as

Siam initially remained tied to gold, the currencies of the British colonial states sharply devalued

against the Siamese baht - making its rice exports significantly uncompetitive. From Table 3 and

Figure 1, it is clear that the pound sterling, the Singapore and Hong Kong dollars significantly

devalued against the baht during a brief period of 1930/31 – 1932/33. Although Siam decided to

follow Britain off gold in May 1932 and pegged the baht to the British pound sterling at the same

exchange rate as when they were on the Gold Standard, the demand for Siamese rice exports and

hence rice export prices and values dramatically fell. More specifically, according to Table 4,

Figures 2 and 3, although the rice price and the values of rice exports had started to decline since

1929, they did not hit the lowest bottom until around 1933 and 1934.

Table 3: Average exchange rate per 100 Siamese baht

Pounds (London) Singapore dollars Hong Kong dollars

1920-21 10.438 85.000 89.625

1921-22 10.438 89.250 84.500

1922-23 9.128 81.500 76.750

1923-24 9.170 77.750 78.500

1924-25 9.234 78.625 80.375

1925-26 9.234 78.625 79.000

1926-27 9.062 77.750 88.500

1927-28 9.234 79.000 90.313

1928-29 9.208 78.875 89.000

1929-30 9.141 78.813 105.250

1930-31 9.050 77.688 154.500

1931-32 10.283 89.875 157.000

1932-33 9.921 86.250 154.813

1933-34 9.234 78.563 129.000

1934-35 9.234 78.375 109.375

1935-36 9.234 78.313 106.063

1936-37 9.234 78.000 143.188

1937-38 9.069 77.250 146.250

1938-39 9.166 78.688 148.125

Source: Own compilation from the Statistical Year books.

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8.000

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Figure 1: Average exchange rates

per 100 Siamese Baht

70.00072.00074.00076.00078.00080.00082.00084.00086.00088.00090.00092.000

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Source: Own depiction based on the information from Siam Statistical Yearbooks.

Note: One baht was equivalent to 43 cents US gold and a picul was 133 pounds (Zimmerman,

1931).

Source: Own depiction based on the information from Siam Statistical Yearbooks.

Note: One baht was equivalent to 43 cents US gold (Zimmerman, 1931)

0.00

2.00

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Figure 2: Average rice price per picul (baht)

White rice price All types rice price

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Figure 3: Value of rice exports (baht)

White rice All types rice

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Table 4: Siamese international trade (1920 -1939)

Period Price (baht) Export volume (picul) Export value (baht) % of total export value Term of trade

White rice All types White rice All rice types White rice All rice types Overall exports All rice types White rice

1920-21 7.23 6.22 2,269,103 4,660,487 16,401,443 28,975,860 90,492,501 32.02 18.12 57

1921-22 8.34 6.58 11,132,211 21,000,584 92,863,023 138,231,324 183,620,381 75.28 50.57 127

1922-23 7.71 5.98 9,565,958 21,079,564 73,798,127 126,088,607 170,459,164 73.97 43.29 118

1923-24 8.22 6.64 10,904,408 22,249,294 89,230,115 143,835,554 201,552,242 71.36 44.27 134

1924-25 9.38 7.20 8,970,490 19,389,040 83,389,142 139,627,629 203,079,862 68.76 41.06 120

1925-26 9.36 7.30 10,789,654 22,929,114 101,041,021 167,409,359 244,731,247 68.41 41.29 135

1926-27 9.69 7.58 10,006,356 21,799,541 96,998,578 165,226,234 239,265,988 69.06 40.54 122

1927-28 9.33 7.02 12,148,476 28,670,654 113,367,254 201,156,349 276,269,363 72.81 41.04 137

1928-29 9.07 7.10 11,995,263 24,667,309 108,751,615 175,123,781 252,474,784 69.36 43.07 133

1929-30 9.33 7.37 9,371,170 18,860,087 87,401,605 139,087,390 219,722,893 63.30 39.78 106

1930-31 7.94 6.02 7,657,843 17,112,330 60,841,337 103,067,718 161,518,891 63.81 37.67 104

1931-32 4.66 3.49 9,360,562 22,200,453 43,608,030 77,500,354 134,206,840 57.75 32.49 134

1932-33 4.15 3.38 12,424,564 27,867,210 51,551,323 94,200,660 152,522,494 61.76 33.80 170

1933-34 3.92 2.99 11,745,889 27,724,631 46,038,117 82,967,330 144,079,014 57.58 31.95 155

1934-35 3.75 2.92 15,784,828 33,701,125 59,252,837 98,437,397 172,594,870 57.03 34.33 170

1935-36 4.6 3.63 11,555,138 25,029,766 53,209,595 90,835,622 158,218,323 57.41 33.63 145

1936-37 4.62 3.69 12,104,106 25,978,445 55,934,050 95,944,444 184,361,153 52.04 30.34 167

1937-38 4.91 4.10 8,949,149 18,370,251 43,935,755 75,342,512 169,492,804 44.45 25.92 152

1938-39 4.61 3.76 11,996,466 25,913,981 55,288,346 97,419,341 204,422,088 47.66 27.05 158

Source: Own compilation from the Statistical Year Books.

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In addition, unlike other primary producing countries that their terms of trade had moved

against them during the Great Depression (Lewis, 1949), Siamese terms of trade actually improved

during and after the crisis (see, Table 4). This indicates that for any level of exports, Siam, on the

contrary, could buy more imports. Nevertheless, the price of its rice -- the main export commodity

-- was evidently damaged by the Great Depression through the above two international trade

forces. Due to the unequal exposure to international trade between the rural households in the

central region and those outside the central region, it was historically predicted that if there was

any impact of the Great Depression on the Siamese at all, households in the central provinces

would be hit more severely (Zimmerman, 1931). In the following sections, the paper empirically

tests whether and how such a slump affected the standard of living of the Siamese rural households

and whether the impacts could be pronounced unequal.

3. Data

The paper makes use of the first and second Siam Rural Economic Surveys conducted in

1930/1931, and 1933/1934 (Zimmerman, 1931; Andrews, 1935)6. As the raw information at the

household level cannot be retrieved, the province-level data7 in the published reports are used in

this paper. Nevertheless, the data presents a rare account of economic conditions of rural

households in developing countries during the time. While, at times there were a number of such

surveys in the West, there existed only a few in Asia (Zimmerman, 1931).

6 The first survey was conducted from December 1930 to July 1931 (Zimmerman, 1931), and the

second survey from April 1933 to March 1934 (Andrews, 1935). 7 Most of the data points in both surveys are provinces, with the exceptions of some that are

districts. For example, Dhonburi was a separate province across the Chao Phraya River from

Bangkok, but nowadays comprises of districts under Bangkok on the West bank of the River.

Whereas, Mae Hiah and San Mahapon were and still are districts in Chiang Mai province.

18

The surveys sampled rural households from all over the country. For each 40 villages,

about 50 families were randomly chosen (Zimmerman, 1931). Nevertheless, some provinces that

were sampled in Zimmerman (1931) were not sampled in Andrews (1935), and vice versa. While

there are 50 provinces in Zimmerman (1931), 42 are reported in Andrews (1935). To create a

balanced panel data set, the paper drops provinces that were not presented in both years, and, thus,

the number of provinces used in the subsequent analyses is reduced to 28, as shown in Figure 4.

Despite the difference in the sampled provinces, to enable as close a comparison of the data under

the same provinces as possible, the second survey was conducted in the same villages as in the

first survey for the repeated provinces (Andrews, 1935, p.5 and p.299). Although the comparisons

are not exact because a number of households covered by one survey were omitted by the other,

the comparison of the average by larger units such as provinces and divisions are well founded.

Whilst rural households in the central practiced commercialised rice farming and depended

more on the sale and exports of rice, rural households in other regions still farmed for subsistence

purpose (Zimmerman, 1931). As such, it is reasonable to categorise provinces into two groups: (i)

those which were exposed to international rice trade (provinces the central plain) and (ii) those

which were not (provinces outside the central plain). In particular, the baseline analysis follows

Zimmerman (1931) in identifying the following 10 provinces as the provinces in the central plain,

henceforth called rice exporters: Bangkok, Dhonburi (now a part of Bangkok), Dhanyaburi (now

a part of Pathumthani province), Ayudhya, Lobburi, Saraburi, Bisnulok, Subarnburi, Bejraburi,

and Chaxerngsao8. These are the provinces symbolised by the triangles in Figure 4. It can clearly

be seen from the figure that they are concentrated in the central region of Siam with relatively

8 The original spellings are retained. To create a balanced data set, Nontaburi and Uthai Dhani

which were not sampled in Zimmerman (1931), and Chandaburi and Laemsingh (a district in

Chandaburi) which were not sampled in Andrews (1935), are taken out.

19

close proximity to Bangkok, denoted by the star, where the main international port was situated

in.

Figure 4: Map of Thailand indicating the locations of provinces used in the analyses

20

The rest of 18 provinces, denoted by the circles, are outside the central plain and classified

by Zimmerman (1931) as provinces engaging in subsistence activities -- henceforth called non-

rice exporters. As seen from Figure 4, they are situated in the North, the Northeast and the South,

and are much further away from Bangkok compared to the provinces denoted by the triangles.

From columns 4 and 5 of Table 5, where the average household variables at the province level are

summarised, the broad-brush differences between the two types of households are evident.

Households in the central plain that engaged in international rice trade had significantly higher

total income, income from rice, expenditure and debts than subsistence households outside the

central plain.

In addition, the two surveys represent different time periods faced by the Siamese. In

particular, the paper classifies the periods under the first and the second surveys as before and after

Siam felt the full presence of the depression respectively. In particular, Table 4, Figures 2 and 3

show that although the rice price and the values of rice exports started to decline around 1929, they

did not hit the lowest bottom until much later, around 1933 and 1934. This also matches the

account in Boomgaard and Brown (2000).

[…] we could argue that the abandonment of the gold standard by Britain and Japan

in 1931 while France and the Netherlands remained tied to gold, marked a crucial

worsening in the course of the depression in Southeast Asia: but for many primary

commodities – notably rice – price did not hit their lowest point until 1933 or 1934.

The classification of the two periods is further supported by Zimmerman’s own account that the

data from the first survey can be seen as from the period before the depression (Zimmerman, 1931,

pp. 4-5).

21

The study is based upon a fairly normal income year, before the slump in prices

made itself felt all over Siam. […] Soon after the work began the effect of the slump

in prices was felt. However, the Commission decided to study the conditions in a

fairly normal year in Siam, without relation to the slump, in order to secure a picture

of typical conditions. The results can be used later to determine the effect of the

slump upon economic conditions […].

Besides the differences between the two types of households, as shown in Table 5, there

exist stark differences between the two periods of time.

Nonetheless, the data in columns 1 to 5, are in nominal terms due to a lack of available

domestic price or consumer price indices during the periods of study. The closest available price

indices are the Indices of Annual Contract Prices of Domestic Foodstuffs Supplied to a

Government Institution, offered in the Statistical Year Book (1934 – 1935, Section IX, Table 9).

Although there is no information of which government institution the indices were based upon, it

was documented that the indices are calculated with the year 1915/1916 as the base year and from

the following 18 foodstuffs; beef (one lb.), dried chilies (one picul), coconuts (100), big green

cucumbers (one picul), duck eggs (100), fresh fish (one picul), garlics (one picul), kapi or shrimp

paste (one picul), onions (one picul), pork (one picul), dried prawns (one catty), pumpkins (one

picul), rice (one picul), sugar (one catty), tamarinds(one picul), fresh turnips (one picul), turnip

roots (one picul) and salted turnips (one picul). These were common foodstuffs that would also be

consumed in average households.

22

Table 5: Summary statistics (Baht)

Mean Nominal values Values in

1933/1934 prices

Total Before After Rice exporters Non-rice exporters Total Before After Rice exporters Non-rice exporters

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Total income 139.977 182.611 97.344 234.593 87.413 123.764 150.185 97.343 207.148 77.44

[101.991] [111.536] [70.563] [104.728] [49.343] [85.357] [91.731] [70.563] [79.873] [42.492]

Income from rice 47.001 60.556 33.446 112.274 10.739 41.625 49.803 33.446 99.815 9.297

[63.283] [72.564] [50.113] [64.922] [14.597] [55.221] [59.679] [50.113] [54.918] [12.028]

Total expenditure 155.628 222.924 88.332 282.475 85.158 135.836 183.339 88.332 246.314 74.459

[139.694] [160.761] [66.806] [159.728] [49.736] [114.324] [132.215] [66.806] [122.234] [39.73]

Food expenditure 37.602 48.002 27.202 55.894 27.44 33.34 39.278 27.202 49.885 24.149

[23.917] [24.309] [18.707] [24.082] [16.931] [20.159] [19.993] [18.707] [19.247] [13.934]

Apparel expenditure 11.032 14.478 7.585 16.858 7.796 9.746 11.908 7.585 14.886 6.891

[6.622] [6.589] [4.611] [6.419] [4.046] [5.442] [5.419] [4.611] [4.64] [3.371]

Farm expenditure 22.479 31.928 13.03 50.226 7.064 19.644 26.258 13.03 43.817 6.214

[34.102] [44.001] [15.74] [45.119] [6.198] [28.444] [36.188] [15.74] [36.59] [5.014]

Interest expenditure 8.066 11.229 4.904 19.507 1.711 7.069 9.235 4.904 17.154 1.467

[12.199] [15.407] [6.708] [13.884] [3.586] [10.281] [12.671] [6.708] [11.1] [2.966]

Debts 80.268 81.181 79.389 194.846 12.87 73.194 66.766 79.389 178.08 11.496

[105.915] [108.67] [104.187] [93.309] [19.985] [96.955] [89.374] [104.187] [85.776] [17.269]

Debt-to-income ratio 0.433 0.275 0.579 0.922 0.145 0.433 0.275 0.579 0.922 0.145

[0.565] [0.305] [0.703] [0.622] [0.243] [0.565] [0.305] [0.703] [0.622] [0.243]

Rainfall (mm.) 1507.856 1534.196 1481.516 1228.945 1662.806 1507.856 1534.196 1481.516 1228.945 1662.806

[576.148] [455.048] [679.298] [175.501] [658.685] [576.148] [455.048] [679.298] [175.501] [658.685]

Note: Standard deviations are in parentheses. Before and after indicates the periods before and after the full presence of the Great Depression. Rice exporters refer to provinces in the

Central Circle region. Values in 1933/1934 prices are calculated by using the Annual Contract Prices of Domestic Foodstuffs Supplied to a Government Institution with 1915/1916 as the base year.

23

While prices of dried chilies, dried prawns and pumpkins saw no change from 1931/1932

to 1933/19349 and prices of coconut, duck eggs, kapi, and pork soared, the rest including rice price

fell. This led to the overall decline of the average price indices of the above 18 articles, from 107

in 1931/1932 to 88 in 1933/1934. Columns 6 to 10 of Table 5 reports the summary statistics in real

terms in terms of 1933/1934 prices. As prices generally fell from 1931 to 1934, the mean values

in 1933/1934 prices reported in columns 6, 7, 9, and 10 are lower than those of nominal values.

Nevertheless, for rural households, most of these foodstuffs, in particular rice, were

domestically grown (Andrews, 1935) and, as a result, the above price indices may not be

applicable. Besides growing their own foodstuffs, when it came to food expenditure, it mostly

occurred in the form of bartering. As indicated in Andrews (1935), expenditures in both surveys

included exchange of goods (bartering) and although a relatively high level of expenditures for

food was observed, overall prices did not matter at all. In other words, for rural households, their

cost of living was less affected by market prices. Changes in price indices are likely to overestimate

changes in the cost of living faced by rural agricultural households.

In addition, with the use of the Indices of Annual Contract Prices of Domestic Foodstuffs

Supplied to a Government Institution, there existed only a single index for each year throughout

the country. This implies that to apply these indices, it has to be assumed that both rice exporter

and non-rice exporter regions faced the same price levels and consumed the same basket of

goods10, which could be highly improbable. With reference to Zimmerman (1931) and Andrews

9 The index from the year 1930/1931 is not available. As the first survey was conducted from

December 1930 to July 1931, the index from 1931/1932 is chosen over the index from

1929/1930. 10 The price indices of the Annual Average Retail Prices of Imported Brands of Food and Drink

are offered in the same section of the same Statistical Year Book. The indices cover Carlsberg

beer, wine, brandy, whisky, champagne, Marie biscuits, butter, chutney, tea, coffee, flour,

24

(1935), households that specialised in rice cultivation tended to give up the cultivation of other

food plants and required to buy foodstuffs. While food expenditures for subsistence households

partook of the nature of a luxury, in the central plain they were of necessity. As a consequence,

not only did prices have little relevance to the lives in rural area in the 1930s Siam, commercialised

and subsistence households tended to face different consumer baskets, raising some concerns in

the application of a single common price index.

Despite the above limitation of the application of the Indices of Annual Contract Prices of

Domestic Foodstuffs Supplied to a Government Institution, to provide an additional analysis in

real terms, the empirical results in 1933/1934 prices based on the use of the indices are

supplemented as robustness checks in the appendix.

4. Empirical Specifications

The paper uses two main empirical specifications to compare relative changes in the

average household economic outcomes at the province level in the depression period relative to

the pre-depression period, and between locations that were exposed to international trade and those

that were not. The first empirical strategy is based on the difference-in-differences (DD) of the

following form.

𝑦𝑖𝑡 = 𝛼0 + 𝛾1𝑅𝑖𝑐𝑒𝑖 + 𝛾2𝐺𝐷𝑡 + 𝛾3𝑅𝑖𝑐𝑒𝑖 ∗ 𝐺𝐷𝑡 + 𝛾4𝑟𝑎𝑖𝑛𝑓𝑎𝑙𝑙𝑖𝑡 + 𝜀𝑖𝑡,

condensed milk, potted meat, canned sardines, salad oil and Worcester Sauce. Although wealthier

households such as those in Bangkok or the central region were more likely to consume imported

food and drink, the articles covered in the indices were more likely to be consumed by foreigners

living in Siam, the nobility, and those who worked in the urban sectors. Households in the two

surveys used in this paper, although some living in Bangkok or the central region, were defined as

rural or agricultural households. As a result, the paper does not make use of the price indices of

the Annual Average Retail Prices of Imported Brands of Food and Drink.

25

where 𝑦𝑖𝑡 is the average province-level rural household economic outcome of province i in year t;

𝛼0 is the intercept. 𝑅𝑖𝑐𝑒𝑖 is the dummy variable indicating whether the province relied on rice as

a commercial export product, i.e. in the central plain. The estimated coefficient of the variable

captures possible differences between the treatment (rice exporters) and the control (subsistence

households) groups prior to when the Great Depression had taken a full effect in Siam.

𝐺𝐷𝑡 is the dummy variable indicating the presence of the Great Depression in Siam. In

particular, it takes the value of one for all provinces during the year 1933/1934, and zero if t is

1930/1931. Whilst the coefficient 𝛾2 captures the direct effect of the Great Depression, 𝛾3, the

coefficient of the interaction term, captures the unequal effect of the Great Depression, depending

on whether the province was exposed to international rice trade. 𝛾3 is the main coefficient of

interest in this paper. In other words, the estimated coefficient 𝛾3 measures the additional change

in household economic outcome after Siam had been fully hit by the Great Depression experienced

by the households that were exposed to international rice trade.

Due to limited availability of exogenous time-variant province-level historical variables,

the only control variable I am able to add here is the logged value of the total amount of rainfall in

province i and year t, represented by 𝑟𝑎𝑖𝑛𝑓𝑎𝑙𝑙𝑖𝑡. Siam Statistical Year Books provide rainfall data

at the Circle Administrative level, where the rainfall information was collected at the capitals of

all 14 circles. To match the rainfall information to the existing province-level analysis, I employ

the method of inverse distance weighting, based on coordinate distance and the rainfall values

from the two nearest circle capitals to estimate the rainfall values at provinces with no actual

rainfall information. The summary statistics of the absolute amount of rainfall in millimetres is

provided in Table 5.

26

The second specification is based on the following fixed-effects (FE) specification.

𝑦𝑖𝑡 = 𝛼𝑖 + 𝛾1𝑅𝑖𝑐𝑒𝑖 + 𝛾2𝐺𝐷𝑡 + 𝛾3𝑅𝑖𝑐𝑒𝑖 ∗ 𝐺𝐷𝑡 + 𝛾4𝑟𝑎𝑖𝑛𝑓𝑎𝑙𝑙𝑖𝑡 + 𝜀𝑖𝑡.

A slight difference is that instead of controlling for two broad groups’ unobservable

characteristics as in the DD model, under the FE specification, unobservable provincial

characteristics are controlled for, by the province fixed effects, 𝛼𝑖 – resulting in dropping the

𝑅𝑖𝑐𝑒𝑖 variable. Although the model is unable to illustrate the difference between rice exporters

and non-rice exporters, it introduces a more detailed control of unobservable time-invariant

province-level characteristics, including geographical and long-term demographic factors such as

population density11, that can potentially confound the main results.

The identification strategy of both specifications relies on the assumptions that (i) being

rice-exporter provinces and (ii) the Great Depression were exogenous to the process that drove the

average provincial household’s living standard, as measured by income, expenditure, and debt,

during the periods of study. Indeed, being rice-exporter provinces is found to be a result of the

ability to produce surplus rice for sale, and this in turn depended on exogenous geographical and

weather conditions as well as exogenous availability of transport. As seen in Section 2.1, the

central region had a comparative advantage in rice cultivation for commercial purposes due to its

vast tracts of cultivable land, regular inundation of the rivers and canals, high quality of soils with

nutrition from the annual inundation, and the ease of communication and transport, especially by

11 Economic geography literature (for instance, see Fujita et al., 1999) would suggest that opening

up to international trade would lead to economic activity being concentrated close to the port,

Bangkok in this case. Thus, observed higher income in the region with closer proximity to

Bangkok could be driven by more concentrated economic activity, possibly captured by population

density. Although population density is inherently time-variant, historical population data in

Thailand are only available on a decadal basis. However, population density during the course of

four years under the study should be relatively stable. The paper, as a result, assumes that the

concentration of economic activities is captured by the province fixed effects.

27

river and state-dug canals. In particular, thanks to their closer proximity to the international port

in Bangkok and hence lower trade cost, households in the central region were more likely to

participate in rice cultivation for international trade.

Likewise, with reference to Section 2.2, it can be claimed that the Great Depression was

truly exogenous to Siam. The Siamese rural household was too small to determine its own rice

price. It was indeed a price-taker. The slump was transmitted through the forces of international

trade, in particular, the exogenous fall in the demand and the exogenous change in the exchange

rate system. Most scholars also agree that the principal causes of the depression in Southeast Asia

lay outside the region (Boomgaard and Brown, 2000). Although it was observed that one of the

major deflationary forces contributing to the world-wide depression could be found in the

agricultural sector that experienced oversupply and downward pressures of the prices prior to the

1930s, for example the USA in 1925 (Kenwood and Lougheed, 1999), and the rubber-rich Malay

States in the 1910s (Boomgaard and Brown, 2000), it can clearly be seen from Table 4 and Figure

2 that prior to the Great Depression, throughout the 1920s, rice -- the major export commodity of

Siam -- had no experience of a fall in price.

5. Empirical Results

Table 6 covers the results on total and rice income. Total income refers to all cash income,

which excludes the in-kind counterpart. Rice income is the income as a result of rice cultivation

and sale (Zimmerman, 1931). From the table, under the DD specification, total and rice income

are shown to be significantly higher among the average households in the central districts,

reflecting the fact that outside the central region, households were subsistence and less dependent

on sources for cash income (Zimmerman, 1931; Manarungson, 2000). In the second rows, it is

apparent that the Great Depression had a direct negative effect on reducing both types of income

28

for both types of rural households. The effects were quantitatively large and significant, in contrast

to what has been usually claimed in the literature (Andrews, 1935; Manarungson, 2000; and

Zimmerman, 1931). In particular, under the FE specification, compared to the pre-depression

period, under the full presence of the Great Depression, the average rural household in Siam

experienced a fall in total income by 49.39 baht, and in income from rice by 11.17 baht, equivalent

to about 35% of the mean total income and 24% income from rice in the dataset.

Table 6: Average province-level household income

Total income Income from rice Share of income from rice

DID FE DID FE DID FE

[1] [2] [3] [4] [3] [4]

Rice export 201.786 (omitted) 123.42 (omitted) 0.321 (omitted)

[22.381]*** [15.042]*** [0.065]***

Great Depression -47.333 -49.392 -11.335 -11.174 -0.026 -0.019

[18.635]*** [11.829]*** [12.524] [6.733]* [0.054] [0.035]

(Rice export)x(Great Depression) -102.216 -99.738 -44.709 -44.902 0.06 0.051

[31.06]*** [19.62]*** [20.874]** [11.173]*** [0.09] [0.059]

Rainfall 18.441 3.282 -2.477 -1.292 -0.045 0.008

[17.546] [16.1] [11.792] [9.163] [0.051] [0.048]

Province dummies NO YES NO YES NO YES

Observations 56 56 56 56 56 56

Number of groups 28 28 28

Adjusted R-squared 0.704 0.883 0.653 0.902 0.529 0.801

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

Moreover, the differential effect on income of the Great Depression between

commercialised and non-commercialised households is significantly pronounced and the

magnitudes of the impacts under both specification are not highly dissimilar. More specifically,

under the FE specification, during the Great Depression, households that grew rice for exports or

the so-called commercialised households experienced a greater decline in their total income (by

approximately 100 Baht equal to 71% of the mean total income in the sample), and rice income

29

(by approximately 45 baht roughly equal to the mean income from rice in the dataset) in

comparison to subsistence households.

Interestingly, despite a fall in the absolute income from rice, columns 5 and 6 show that

the share of income from rice for both types of the households stayed the same. In other words,

there is no significant fall in the share of income contributed by rice cultivation under the Great

Depression. This plausibly reflects the fact that in the short run, households although experienced

a fall in absolute income from rice, they found it hard to reallocate economic activities towards

other sources of income and hence could not diversify risk. In particular, rice was usually planted

a season ahead and households had to face the price the market offered during the harvest time.

Due to the fact that both storage was primitive at the period of study and price steadily declined

during the Great Depression, there was no incentive for farmers to keep their stocks even during

the Great Depression.

From Table 7, the unequal effect of the Great Depression is also clearly illustrated under

the case of the overall expenditure. Overall expenditure covers expenditure on farming costs, taxes,

interest, food, clothing, health, tobacco, betel and areca, drugs, alcohol, weddings, and marital

customs, religious rites and ceremonies, gifts and charity (Zimmerman, 1931). Under both DD and

FE models, households that were exposed to international rice trade saw a greater fall in their

expenditure during the Great Depression by as high as 180.80 baht under the DD model, and by

178.20 baht under the FE model, when compared to non-commercialised households.

Even though the Great Depression is found to hamper rice exporters’ total expenditure to

the greater extent, from columns 3 and 4 of Table 6 its detrimental effect on reducing food

expenditure seems to be equally borne by both types of households. This could be potentially

explained by the fact that food is an essential good and thus the expenditure on food is likely to be

30

income inelastic. Commercialised households might adjust other types of more luxurious

expenditure downwards, in order to achieve a reasonable or minimal standard of food

consumption. Such a hypothesis is to a certain extent confirmed by the result in column 6. From

column 6, although for both types of households the expenditure on clothing significantly fell

during the Great Depression, commercialised households are found to adjust their expenditure on

clothing downward significantly more than non-commercialised households outside the central

region.

In addition, due to a potential future fall in profits from rice exports, farmers in rice-

exporting region are found to be more discouraged from expenditure on farm and become less able

to pay back the interest, as shown in columns 7 to 10 of Table 7. As subsistence households only

grew rice for household consumption, their expenditure on farm should be roughly stable despite

the unfavourable market force. In contrast, households that grew rice for commercialisation --

exports in particular -- might reduce their production and hence expenditure on farm, as rice price

continuously slumped. Moreover, decreased expenditure on interest among households in the

central region during the Great Depression could imply both their lower ability to pay back during

the hard time and the extent of flexibility in the Siamese credit market during the crisis. Andrews

(1935) points out that most lending and borrowing were between relatives and friends, and interest

was frequently not demanded at all on such contracts. Even on the contracts with creditors with no

personal tie such as the Chinese moneylenders, interest rates were kept within the legal limit.

31

Table 7: Average province-level household expenditure

Expenditure Total Food Apparel Farm Interest

DID FE DID FE DID FE DID FE DID FE

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Rice export 289.884 (omitted) 32.009 (omitted) 12.347 (omitted) 62.613 (omitted) 23.585 (omitted)

[26.117]*** [6.846]*** [1.342]*** [9.814]*** [3.143]***

Great Depression -69.135 -71.3 -18.56 -19.074 -4.617 -4.742 -5.006 -5.208 -2.155 -2.237

[21.746]*** [14.79]*** [5.7]*** [3.683]*** [1.117]*** [0.671]*** [8.172] [6.439] [2.617] [2.342]

(Rice export)x(Great Depression) -180.801 -178.196 -5.153 -4.535 -6.117 -5.966 -38.894 -38.651 -11.812 -11.713

[36.244]*** [24.544]*** [9.5] [6.111] [1.862]*** [1.114]*** [13.62]*** [10.685]*** [4.362]*** [3.888]***

Rainfall 11.42 -4.514 5.158 1.376 1.191 0.269 0.023 -1.464 -0.619 -1.224

[20.474] [20.129] [5.367] [5.012] [1.052] [0.914] [7.694] [8.763] [2.464] [3.189]

Province dummies NO YES NO YES NO YES NO YES NO YES

Observations 56 56 56 56 56 56 56 56 56 56

Number of groups 28 28 28 28 28

Adjusted R-squared 0.785 0.902 0.497 0.794 0.748 0.911 0.492 0.69 0.593 0.679

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively. DID, difference-in-differences. FE, fixed effects.

Rainfall denotes to log(rainfall).

32

Whilst all above results are confirmed qualitatively, although with lower magnitudes, by

the empirical results based on real values in 1933/1934 prices reported in the appendix (Tables A1

to A6), the nominal and real results on debts and debt-to-income ratio are qualitatively different.

Whereas from Table 8 it is only observed that rice exporters had significantly higher debts and

debt-to-income ratio, from Table A3 they also experienced disproportionately higher real debts

and real debt-to-income ratio in 1933/1934 prices during the Great Depression.

Table 8: Average province-level household debts

Debts Debt-to-income ratio

DID FE DID FE

[1] [2] [3] [4]

Rice export 173.213 (omitted) 0.383 (omitted)

[17.157]*** [0.146]***

Great Depression -5.771 -4.989 0.038 0.07

[14.557] [7.989] [0.122] [0.112]

(Rice export)x(Great Depression) 17.93 17.194 0.751 0.717

[23.709] [12.759] [0.2] [0.179]***

Rainfall 1.287 2.161 -0.099 -0.007

[13.113] [10.051] [0.112] [0.144]

Province dummies NO YES NO YES

Observations 108 108 54 54

Number of groups 28 28

Adjusted R-squared 0.685 0.91 0.611 0.697

Note: Standard errors are in parentheses. **, *** Significant at the 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

At one level, the results reflect the difference in the nature of commercialised and

subsistence agriculture. Andrews (1935) claims that debts were inalienable from commercialised

agriculture. Due to the seasonal character of farming, financial needs and profits were concentrated

in two well marked periods of the year. In the planting season when soil and crops were prepared,

funds were needed and borrowed. At the end of the harvesting season, when crops were sold, funds

were earned and repaid. The resulting contract led to short-term debts. In addition, long-term

33

borrowing was used for land purchase and equipment improvement. On the contrary, for

subsistence households, the scale of cultivation was low, the greater part of crops was not sold but

consumed, and hence the financial needs of these farmers were also small. It was noted that debts

among poor subsistence households were only usually made against the head tax of 4 baht and the

land tax (Andrews, 1935).

Furthermore, the differential effect of the Great Depression on real debts and real debt-to-

income ratio could potentially reflect the reduction in prices of and hence income from rice crops,

which were intensively cultivated in the central plain (Andrews, 1935). For example, on average,

a household of one rice-farming village in Chaxerngsao province suffered an operation loss of 70.7

baht in 1933 and the loss was reported to be chiefly covered by borrowed money (Andrews, 1935).

In Saraburi and Dhanyaburi provinces, farmers also experienced high debts, which led to a number

of land foreclosures in 1933 (Andrews, 1935). The accumulated unpaid interest, taxes, and land

rentals accounted for a large part of the debt increase of 1933 of the central farmers (Andrews,

1935). In particular, for the farmers in Dhanyaburi and Ayudhya who relied more on rented land,

low rice price implied that rentals remained unpaid and accumulated. Rental prices were also

reported to have not been scaled down during the crisis. As a result, foreclosures were found of no

importance in 1933 except for the Central Division where they amounted to about 50% of the

voluntary repayments on debts, and nearly 100% of the voluntary repayments on loans. However,

low prices for crops made it undesirable for landlords to foreclose on secured land holdings in

general (Andrews, 1935).

Nevertheless, the disproportionately increase of real debts for commercialised households

during the Great Depression could also simply indicate the availability of credit even during the

crisis time to the group which was also found to be more vulnerable during the crisis. Unlike the

34

Burmese counterparts, credit was not, on average, contracted as a result of the Great Depression

but expanded to meet the need. According to Andrews (1935, p. 294), although the Cooperative

Societies had been gradually developed in the 1930s and borrowing from shopkeepers, middlemen,

and landlords was not uncommon, a very high percentage of Siamese farmers borrowed from

informal money lenders who were usually tied by blood or friendship with them. As noted in

Zimmerman (1931, p. 206), neighbours constituted a usual source of credit for small loans in the

central region and for usual loans outside the central region. Long and intimate knowledge of each

other assures both creditor and debtor of fair treatment on both sides. Although for households in

the central plain, medium and large loans were from Chinese merchants, paddy-buyers, and money

lenders (Zimmerman, 1931), they usually had intimate knowledge of the farmers due to their

connections as rice retailers, millers and domestic distributors (Skinner, 1957). The contracts were

based on future in-kind rather than cash repayment or land collateral, and hence were neither

stringent nor unfair to the borrowers. The borrowers were also found to make every reasonable

effort to pay back.

This is in contrast with the Burmese experience. From the final decades of the nineteenth

century, Chettiar moneylenders had been providing substantial credit for the expansion of rice

cultivation in the Burma delta. However, during the Great Depression, the Chettiar moneylenders’

funds which were borrowed from the local Western banks were sharply contracted, resulting in a

sharp reduction of their new lending and existing loans to the Burmese rice cultivators. As a result,

unlike the Siamese farmers, the Great Depression brought credit contraction, debt default, and

widespread land foreclosure to the Burmese counterparts (Adas, 1974).

6. Robustness Checks

35

This section provides robustness checks to the above results by using more objective

measures of the exposure to international rice trade. In Sections 4 and 5, the analysis follows the

identification used in Zimmerman (1931) that households in the central plain were those that

participated in rice commercialisation and hence international rice trade. Two factors are singled

out as the main determinants of their participation in international rice trade; (i) geographically

determined advantages in rice cultivation and (ii) better accessibility to international ports in

Bangkok (Andrews, 1935; Manarungson, 2000; and Zimmerman, 1931). In this section, as a

consequence, instead of making an assumption that only the 10 provinces in the central region

from the surveys were rice exporters and hence a binary measure of the participation in

international trade equal to one is only assigned to these provinces, more refined exogenous and

objective measures of the exposure to international trade based on the above two determinants are

used. More specifically, (i) rice suitability index, and (ii) coordinate distance from Bangkok are

used to capture exogenous provincial variation in geographical advantages and hence exposure to

international trade.

Data and variables

The measure of rice suitability is provided by the Rice Potential Zoning Project under the

Rice Department. The project was initiated by the Department of Agriculture back in 1999, with

an aim of constructing a database of suitable area for rice cultivation of three types; (i) fragrant

rice, (ii) white rice, and (iii) glutinous rice. To construct the index, each provincial agricultural

office conducted a random soil survey based on a map of 1:50,000 scale. For each square kilometre

of the randomly selected units, soil sample of one kilogram was collected from 10 sampled points

to analyse its physical and chemical properties. In addition, interviews with farmers were

conducted to acquire additional information on contextual land use, soil preparation, types of rice,

36

and access to irrigation. In sum, the index construction is mainly based on (i) geographical factors

such as gradient and proneness to landslide, (ii) physical and chemical properties of the soil such

as sand and clay mixture and pH value, (iii) weather conditions and seasonal variation, (iv) access

to irrigation such as natural rivers and man-made irrigation canals, and (v) location proximity to

non-agricultural zones such as industrial parks and urban towns. Crucially, the above factors can

be viewed as exogenous to households’ economic conditions since it is constructed from

exogenously determined factors.

The original measure provided by the Project is divided into four levels. For each province,

district, and sub-district, percentages of land (i) highly, (ii) moderately, (iii) poorly and (iv) not

suitable for rice cultivation are provided. Land that is highly suitable for rice cultivation is defined

as being highly fertile and delivering high yield of greater than 550 kilograms of rice per rai.

Moderately suitable land faces some limitations in rice cultivation and hence provides the yield of

450 to 550 kilograms of rice per rai. While land that is poorly suitable can be cultivated if managed

rightly and yielded 350 to 450 kilograms of rice per rai, land that is not at all suitable for rice

cultivation is costly to prepared and managed and can only yield less than 350 kilograms of rice

per rai. In this paper, I use the percentage of land highly suitable for rice cultivation at the province

level as a measure of rice suitability in the subsequent robustness checks.

As most of the above geographical, weather, physical and chemical conditions of the area

and the soil are likely to stay fixed over time, it is expected that provinces with greater percentages

of area highly suitable for rice cultivation, were more likely to cultivate rice for commercialisation

and hence participate in international rice trade in the 1930s. The provinces in the central region,

have, on average 66.18% of their area highly suitable for rice cultivation, in contrast to 42.73% for

37

those outside the region. The summary statistics of the variable is provided in the Panel A of Table

9.

Table 9: Robustness check -- Summary statistics and determinants of trade exposure in pre-depression period

Panel A: Summary statistics Mean Min. Max.

% of land highly suitable for rice cultivation 0.51 0.028 1

[0.297]

Coordinate distance from Bangkok (kilometres) 386.518 0.1 823.71

[258.714]

Panel B: Rice export (trade exposure) -- Logistic estimation [1] [2] [3]

% of land highly suitable for rice cultivation 4.008 1.444

[1.785]** [4.522]

Coordinate distance from Bangkok (kilometres) -0.018 -0.017

[0.007]*** [0.007]**

Observations 28 28 28

Log likelihood -14.921 -3.818 -3.77

Pseudo R-squared 0.182 0.791 0.793

Note: Standard deviations and standard errors are in parentheses.

**, *** Significant at the 5% and 1% levels, respectively.

Coordinate distance from Bangkok captures the proximity of the province to international

ports in Bangkok. Provinces closer to Bangkok are expected to have lower transport cost to

participate in international rice trade and hence more likely to get affected by the Great Depression

to a greater extent. Rice was mainly transported to Bangkok by barges and cargo boats and to a

lesser extent by trains (Zimmerman, 1931). Rapid increase in rice milling and export following the

Bowring treaty led to a specialised type of internal trading in Lower and Middle Siam. Chinese

paddy dealers collected paddy crops from individual farmers in Lower and Middle Siam and

transported them in barges along the Chao Phraya River, which cut Siam vertically in half and run

straight to Bangkok to the Bangkok mills and then to international ports (Skinner, 1957). The

statistics from Siam Statistical Year Books show that number of licenses issued for barges and

38

cargo boats had a high correlation with the timing of the Great Depression. It fell from over 9,000

licenses before 1932, to 3,414 in 1932/33, and plummeted to 56 in 1933/34. Likewise, although to

a lesser extent, traffic in paddy from rail stations outside Bangkok to Bangkok reduced from

188,465 tons in 1930/31 to 158,188 tons in 1933/34. In other words, during the depth of the Great

Depression when international rice trade slumped, transport of rice within the country also fell,

illustrating the interconnection between domestic rice transport and international rice trade.

Although the paper lacks a comprehensive measure of trade cost arisen from domestic rice

transport, coordinate distance from each province to Bangkok potentially offers an approximation

of transport cost and captures the differential degrees in the exposure to international trade. On

average, the sampled provinces in the central plain are 107.65 kilometres away from Bangkok,

while those outside the central plain are on average 556.9 kilometres away. Summary statistics of

coordinate distance from Bangkok is provided in Panel A of Table 8.

To provide a direct check of how well the ex-post rice suitability and trade cost measures

capture historical conditions, correlations between provinces’ suitability for rice cultivation and

coordinate distance from Bangkok, and historical income from rice from the pre-depression period

are illustrated in Figures 5 and 6. Income from rice from the pre-depression period (Zimmerman,

1931) potentially provides a non-binary proxy for the provinces’ advantage in rice production for

commercialisation and hence exposure to international trade in the 1930s. While Figure 5 shows a

clear positive correlation between rice suitability index and income from rice, Figure 6 shows a

negative correlation between coordinate distance from Bangkok and income from rice. Both

figures reassure that to a certain extent the modern-day rice suitability and trade cost measures,

used in the subsequent empirical strategy, provide a reasonable approximation for historical

conditions of exposure to international trade.

39

0

50

100

150

200

250

300

0 0.2 0.4 0.6 0.8 1 1.2

Inco

me

fro

m r

ice,

pre

-dep

ress

ion p

erio

d (

bah

t)

% of land highly suitable for rice cultivation

Figure 5: Bivariate relationship between rice suitability and

income from rice in pre-depression period

-50

0

50

100

150

200

250

300

0 100 200 300 400 500 600 700 800 900

Inco

me

fro

m r

ice,

pre

-dep

ress

ion p

erio

d (

bah

t)

Coordinate distance from Bangkok (kilometres)

Figure 6: Bivariate relationship between coordinate distance from

Bangkok and income from rice, pre-depression period

40

Additionally, a simple regression analysis illustrating a correlation between the present-

day measures of rice suitability and transport distance, and historical binary measure of trade

exposure based on Zimmerman (1931)’s identification of provinces in the Central Circle

Administration used in the baseline analysis is given in the Panel B of Table 9. Independently,

both determinants of international trade participation exert statistically significant relationship

with the binary identification of whether the province belonged to the central region. Nevertheless,

in column 3 when both factors are added together in the regression analysis, the percentage of land

highly suitable for rice cultivation loses its statistically significant explanatory power, and only

coordinate distance from Bangkok remains statistically significant.

Empirical strategy and results

The robustness checks to the baseline results are based on the following specifications.

𝑦𝑖𝑡 = 𝛼0 + 𝛾1𝑟𝑖𝑐𝑒 𝑠𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑖 + 𝛾2𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝐵𝐾𝐾𝑖 + 𝛾3𝐺𝐷𝑡 + 𝛾4𝑟𝑖𝑐𝑒 𝑠𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑖

∗ 𝐺𝐷𝑖𝑡 + 𝛾5𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝐵𝐾𝐾𝑖 ∗ 𝐺𝐷𝑡 + 𝛾6𝑟𝑎𝑖𝑛𝑓𝑎𝑙𝑙𝑖𝑡 + 𝜀𝑖𝑡,

and

𝑦𝑖𝑡 = 𝛼𝑖 + 𝛾1𝑟𝑖𝑐𝑒 𝑠𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑖 + 𝛾2𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝐵𝐾𝐾𝑖 + 𝛾3𝐺𝐷𝑡 + 𝛾4𝑟𝑖𝑐𝑒 𝑠𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑖

∗ 𝐺𝐷𝑡 + 𝛾5𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝐵𝐾𝐾𝑖 ∗ 𝐺𝐷𝑡 + 𝛾6𝑟𝑎𝑖𝑛𝑓𝑎𝑙𝑙𝑖𝑡 + 𝜀𝑖𝑡.

To capture the extent of the exposure to international rice trade, the binary variable

indicating whether the average household belongs to the province that was in the Central Circle

Administration used in the baseline specification is replaced by two exogenously determined

variables; (i) rice suitability index, and (ii) coordinate distance from Bangkok, which are identified

in the literature as the main determinations of international trade participation in the 1930s. While

the first specification is the OLS, the second is the fixed-effect specification where 𝛼𝑖 is the

41

province-fixed effect that captures all the province-level time-invariant characteristics including

rice suitability and distance from Bangkok. As such, in the fixed-effect specification, both

𝑟𝑖𝑐𝑒 𝑠𝑢𝑖𝑡𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑖 and 𝑑𝑖𝑠𝑡𝑎𝑛𝑐𝑒 𝑓𝑟𝑜𝑚 𝐵𝐾𝐾𝑖 are dropped from the analysis. The main coefficients

of interest that represent the unequal effect of the Great Depression are 𝛾4 and 𝛾5. The

specification enables the paper to separately consider the marginal impact of the Great Depression

on household economic conditions in relation to two different dimensions of the exogenous

determinants of trade exposure in the 1930s.

Table 10 provides a robustness check on the results of average province-level household

total income and income from rice. From the OLS specifications, households in the provinces with

more percentages of land highly suitable for rice cultivation attained significantly higher total

income. Likewise, households in provinces further away from Bangkok tended to be significantly

poorer. Both results reassure the baseline findings in Section 5 that households in the central

region, which according to Zimmerman (1931) were more suitable for rice cultivation and better

linked to networks of transport, are found to have significantly more total income and income from

rice.

In addition, similarly to the results in Table 6, the results in Table 10 largely confirm that

the Great Depression dampened income for all types of households but had a significantly weaker

negative effect on the households in provinces that were further away to Bangkok, i.e. households

that were less likely to be rice exporters. Nevertheless, the unequal effect of the Great Depression

based on the rice suitability index is not found.

This could, however, be explained by the construction of the present-day rice suitability

variable. Not only does the variable encompass geographical factors, such as soil types, elevation

and seasonal variation, that are likely to be invariant over time, it also captures time-variant factors

42

such as access to man-made irrigation and proximity to industrial zones and urban areas, both of

which have been proliferated long after the 1960s, when Thailand started to implement the first

Five-Year Development Plan. Although there could be an endogeneity concern that irrigation

canals and the location of industrial zones might be influenced by the pattern of past agricultural

area, the construction of irrigation canals mostly follows exogenous natural courses of the existing

rivers (Chankrajang, 2012) and industrial zones are the result of exogenous government

development plan.

Table 10: Robustness Check -- Average province-level household income

Total income Income from rice Share of income from rice

OLS FE OLS FE OLS FE

[1] [2] [3] [4] [3] [4]

Soil suitability for rice cultivation 89.859 (omitted) 5.829 (omitted) 0.055 (omitted)

[43.317]** [32.16] [0.129]

Distance from Bangkok -0.315 (omitted) -0.196 (omitted) -0.0004 (omitted)

[0.052]*** [0.038]*** [0.0002]***

Great Depression -129.696 -129.286 -55.69 -55.186 0.126 0.13

[51.266]** [27.447]*** [38.062] [18.756]*** [0.153] [0.082]

(Soil suitability)x(Great Depression) -45.717 -47.944 4.862 2.122 -0.053 -0.075

[61.526] [33.15] [45.679] [22.653] [0.184] [0.1]

(Distance)x(Great Depression) 0.178 0.181 0.066 0.07 -0.0003 -0.0002

[0.071]** [0.038]*** [0.053] [0.026]*** [0.0002] [0.0001]**

Rainfall 12.627 19.407 -6.582 1.763 -0.073 -0.005

[20.146] [15.861] [14.957] [10.839] [0.06] [0.048]

Province dummies NO YES NO YES NO YES

Observations 56 56 56 56 56 56

Number of groups 28 28 28

Adjusted R-squared 0.635 0.896 0.478 0.873 0.377 0.82

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

In addition, there exist some differences in types of rice cultivated and traded between the

1930s and the present period. Better access to irrigation due to increased construction of irrigation

canals after the 1960s means that there are areas that were less suitable for rice cultivation in the

43

1930s, such as the arid Northeast, that become more suitable for rice cultivation nowadays and can

now produce excess rice for commercialisation. Moreover, glutinous rice that was only cultivated

for home consumption in the North and Northeast and not for export during the 1930s, is also

considered as one of the three varieties of rice in the construction of rice suitability index. This, as

a result, could further weaken the correlation between the modern-day rice suitability and historical

exposure to international trade. As a consequent, rice suitability index may not perfectly capture

the extent of geographical advantages in rice cultivation in the 1930s, leading to differential results

from what we observe in the baseline analysis.

Nevertheless, on average, the results in Tables 10, 11, A1, A6, A7, and A8 qualitatively

confirm the results observed in Tables 6, 7 and 8. As such, by using both (i) subjective measure of

exposure to international trade -- following Zimmerman (1931)’s identification of commercialised

provinces, and (ii) more objective measures of exposure to international trade based on rice

suitability and coordinate distance from Bangkok, it is consistently found that there existed the

unequal effects of the Great Depression such that the rural households in the provinces that were

more connected to the international rice trade were hit harder in terms of income, expenditure, and

debts.

7. Conclusion

From the empirical results, under both baseline and robustness check specifications, with

the exception of food expenditure, it is consistently found that the Great Depression projected more

detrimental effects in terms of income and expenditure onto households in the central region of

Siam that were exposed to the international rice trade, compared to households in the region that

practiced subsistent cultivation. Despite the limitation of usual historical data, in particular, a

relatively small number of observations and hence potentially large standard errors, the statistical

44

significant impacts of the findings are striking. It shows us that even when the international trade

was relatively limited and relatively smaller in values compared to today’s measures, financial

crisis was able to get transmitted to the periphery through one of the channels of globalisation –

i.e. international trade. In the time of global crisis, exposure to international trade had been

translated into exposure to a fall in living standards, and this is empirically shown by the unequal

effects of the Great Depression on the commercialised and subsistent households in rural Siam.

Acknowledgement

I would like to thank Supachoke Thawornkaiwong, Edward Tower, and the participants at

the Fifth Asian Historical Economics Conference, 2016, the Economic History Society

Conference, 2017, and the Royal Economic Society Conference, 2017, in particular, Bishnupriya

Gupta, David S. Jacks, Cong Liu, Christopher M. Meissners, Florian Ploeck, Kwok Tong Soo, and

Pierre van der Eng for valuable comments and suggestions. I also thank Jessica

Vechbanyongratana for sharing some data from the Statistical Year Books. Funding for this work

was made possible by Faculty of Economics, Chulalongkorn University (Research Grant).

45

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48

APPENDIX I: The Derivation of the Degree of Openness of Siam in 1929

Although the Statistical Year Books provide the author with export and import values, in

order to derive the degree of openness, the information on the GDP is needed. As the concept of

GDP did not exist at the time and its information is not provided in any of the Siamese account,

the paper relies on the GDP values provided in the Maddison-Project (Maddison, 2013). The

closest period of the period of the study that the Maddison-Project covers for Siam is 1929. As

such, the degree of openness of Siam used as a reference in this paper is of the year 1929. As

calculated in the Maddison-Project, Siamese GDP in 1929, in 1990 Int. GK$, is 9,561,994,000.

Export and import values provided by the Statistical Year Books are in baht. In particular,

in 1929 export value was 219,722,893 baht, whilst import value was 206,713,078 baht. To convert

these values into US dollars, I use the account in Zimmerman (1931) that one baht was equivalent

to 43 US cents. Accordingly, in 1929 dollars, export and import value in 1929 amounts to

183,367,467.50 US dollars.

To convert this amount to the amount in 1990 dollars, the relative price between 1990 and

1929 is constructed from the consumer price indices provided in

http://www.usinflationcalculator.com/inflation/consumer-price-index-and-annual-percent-

changes-from-1913-to-2008/. In particular, the 𝐶𝑃𝐼1929 is 17.1, and the 𝐶𝑃𝐼1990 is 130.7. Thus, the

value of the 1929’s export and import in 1990 dollar is (183,367,467.50) X (130.7

17.1), which is

equivalent to 1,401,527,953 US dollars. As a result, the degree of openness of Siam in 1929 is

1,401,527,953

9,561,994,000 𝑋 100, which is equal 14.657%.

49

APPENDIX II: Empirical Results in Real Values (in 1933/ 1934 Prices)

Table A1: Robustness Check -- Average province-level household expenditure

Expenditure Total Food Apparel Farm Interest

OLS FE OLS FE OLS FE OLS FE OLS FE

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Soil suitability for rice cultivation 121.61 (omitted) 22.818 (omitted) 7.391 (omitted) 1.652 (omitted) 13.858 (omitted)

[50.073]** [11.372]** [2.848]*** [17.734] [5.413]***

Distance from Bangkok -0.463 (omitted) -0.052 (omitted) -0.016 (omitted) -0.117 (omitted) -0.038 (omitted)

[0.06]*** [0.014]*** [0.003]*** [0.021]*** [0.006]***

Great Depression -209.804 -208.965 -28.43 -28.412 -6.833 -6.799 -50.446 -50.298 -7.944 -7.813

[59.262]*** [36.518]*** [13.459]** [8.918]*** [3.371]** [1.767]*** [20.988]** [15.778]*** [6.407] [5.31]

(Soil suitability)x(Great Depression) -77.221 -81.783 1.734 1.635 -5.27 -5.456 3.059 2.257 -11.277 -11.984

[71.122] [44.106]* [16.152] [10.771] [4.405] [2.134]** [25.188] [19.056] [7.689] [6.413]*

(Distance)x(Great Depression) 0.298 0.305 0.018 0.018 0.007 0.007 0.078 0.079 0.019 0.02

[0.082]*** [0.051]*** [0.019] [0.012] [0.005] [0.002]*** [0.029]* [0.022]*** [0.009]** [0.007]***

Rainfall 7.728 21.618 2.505 2.806 0.553 1.119 0.846 3.288 -0.872 1.282

[23.288] [21.104] [5.289] [5.154] [1.325] [1.021] [8.248] [9.118] [2.518] [3.068]

Province dummies NO YES NO YES NO YES NO YES NO YES

Observations 56 56 56 56 56 56 56 56 56 56

Number of groups 28 28 28 28 28

Adjusted R-squared 0.768 0.901 0.543 0.799 0.626 0.897 0.453 0.691 0.602 0.727

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively. DID, difference-in-differences. FE, fixed effects.

Rainfall denotes to log(rainfall).

50

Table A2: Robustness Check -- Average province-level household debts

Expenditure Debts Debt-to-income ratio

OLS FE OLS FE

[1] [2] [3] [4]

Soil suitability for rice cultivation 99.65 (omitted) 0.209 (omitted)

[34.87]*** [0.315]

Distance from Bangkok -0.269 (omitted) -0.0006 (omitted)

[0.039]*** [0.0003]*

Great Depression 29.459 45.633 0.711 0.879

[39.854] [19.539]** [0.353]** [0.327]***

(Soil suitability)x(Great Depression) -37.3 -58.47 0.057 -0.187

[47.773] [23.486]** [0.427] [0.4]

(Distance)x(Great Depression) -0.031 -0.033 -0.001 -0.001

[0.053] [0.025] [0.0005]** [0.0004]***

Rainfall 12.373 5.263 -0.179 -0.038

[14.694] [10.1] [0.132] [0.172]

Province dummies NO YES NO YES

Observations 108 108 54 54

Number of groups 28 28

Adjusted R-squared 0.621 0.914 0.488 0.602

Note: Standard errors are in parentheses. **, *** Significant at the 5% and 1% levels, respectively. DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

Table A3: Average province-level household real income (in 1933/1934 prices)

Total income Income from rice Share of income from rice

DID FE DID FE DID FE

[1] [2] [3] [4] [3] [4]

Rice export 166.923 (omitted) 101.562 (omitted) 0.321 (omitted)

[20.265]*** [13.48]*** [0.065]***

Great Depression -27.346 -29.097 -8.363 -8.185 -0.026 -0.019

[16.873] [10.735]*** [11.224] [5.841] [0.054] [0.035]

(Rice export)x(Great Depression) -67.321 -65.215 -22.781 -22.994 0.06 0.051

[28.123]** [17.814]*** [18.707] [9.693]** [0.09] [0.059]

Rainfall 18.731 5.847 -1.823 -0.518 -0.045 0.008

[15.887] [14.61] [10.567] [7.949] [0.051] [0.048]

Province dummies NO YES NO YES NO YES

Observations 56 56 56 56 56 56

Number of groups 28 28 28

Adjusted R-squared 0.654 0.863 0.634 0.903 0.529 0.801

Note: Standard errors are in parentheses. **, *** Significant at the 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

51

Table A4: Average province-level household real expenditure (in 1933/1934 prices)

Expenditure Total Food Apparel Farm Interest

DID FE DID FE DID FE DID FE DID FE

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Rice export 239.063 (omitted) 26.636 (omitted) 10.189 (omitted) 51.563 (omitted) 19.396 (omitted)

[22.517]*** [6.043]*** [1.247]*** [8.266]*** [2.647]***

Great Depression -47.686 -49.548 -11.947 -12.425 -2.82 -2.927 -3.273 -3.44 -1.653 -1.718

[18.748]*** [11.919]*** [5.032]** [3.133]*** [1.038]*** [0.652]*** [6.883] [5.126] [2.204] [1.93]

(Rice export)x(Great Depression) -129.939 -127.698 0.245 0.82 -3.968 -3.84 -27.817 -27.617 -7.611 -7.533

[31.248]*** [19.779]*** [8.386] [5.2] [1.731]** [1.082]*** [11.471]** [8.506]*** [3.673]** [3.198]**

Rainfall 11.798 -1.907 5.386 1.865 1.109 0.323 0.269 -0.957 -0.512 -0.989

[17.652] [16.221] [4.737] [4.264] [0.978] [0.887] [6.48] [6.976] [2.075] [2.623]

Province dummies NO YES NO YES NO YES NO YES NO YES

Observations 56 56 56 56 56 56 56 56 56 56

Number of groups 28 28 28 28 28

Adjusted R-squared 0.762 0.906 0.449 0.79 0.678 0.875 0.482 0.718 0.593 0.695

Note: Standard errors are in parentheses. **, *** Significant at the 10%, 5% and 1% levels, respectively. DID, difference-in-differences. FE, fixed effects.

Rainfall denotes to log(rainfall).

52

Table A5: Average province-level household real debts (in 1933/1934 prices)

Debts Debt-to-income ratio

DID FE DID FE

[1] [2] [3] [4]

Rice export 142.49 (omitted) 0.383 (omitted)

[15.203]*** [0.146]***

Great Depression -2.954 -2.162 0.038 0.07

[12.899] [6.847] [0.122] [0.112]

(Rice export)x(Great Depression) 48.635 47.908 0.751 0.717

[21.009]** [10.935]*** [0.199]*** [0.179]***

Rainfall 1.198 1.826 -0.099 -0.007

[11.619] [8.614] [0.112] [.144]

Province dummies NO YES NO YES

Observations 108 108 54 54

Number of groups 28 28

Adjusted R-squared 0.716 0.921 0.611 0.697

Note: Standard errors are in parentheses. *** Significant at the 1% level. DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

Table A6: Robustness Check -- Average province-level household real income (in 1933/1934 prices)

Total income Income from rice Share of income from rice

OLS FE OLS FE OLS FE

[1] [2] [3] [4] [3] [4]

Soil suitability for rice cultivation 73.692 (omitted) 4.891 (omitted) 0.055 (omitted)

[39.29]* [28.512] [0.129]

Distance from Bangkok -0.26 (omitted) -0.16 (omitted) -0.0004 (omitted)

[0.047]*** [0.034]*** [0.0002]***

Great Depression -84.547 -84.244 -31.618 -31.208 0.126 0.13

[46.505]* [24.988]*** [33.744] [15.367]** [0.153] [0.082]

(Soil suitability)x(Great Depression) -29.354 -30.999 5.65 3.423 -0.053 -0.075

[55.806] [30.18] [40.497] [18.56] [0.184] [0.1]

(Distance)x(Great Depression) 0.123 0.126 -0.16 0.034 -0.0003 -0.0002

[0.064]* [0.035]*** [0.034]*** [0.021] [0.0002] [0.0001]**

Rainfall 12.186 17.197 -6.245 0.536 -0.073 -0.005

[18.273] [14.441] [13.261] [8.881] [0.06] [0.048]

Province dummies NO YES NO YES NO YES

Observations 56 56 56 56 56 56

Number of groups 28 28 28

Adjusted R-squared 0.572 0.876 0.461 0.888 0.377 0.82

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).

53

Table A7: Robustness Check -- Average province-level household real expenditure (in 1933/1934 prices)

Expenditure Total Food Apparel Farm Interest

OLS FE OLS FE OLS FE OLS FE OLS FE

[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]

Soil suitability for rice cultivation 99.959 (omitted) 18.711 (omitted) 6.076 (omitted) 1.37 (omitted) 11.418 (omitted)

[43.28]** [10.103]* [2.597]** [14.982]* [4.618]**

Distance from Bangkok -0.381 (omitted) -0.043 (omitted) -0.013 (omitted) -0.096 (omitted) -0.031 (omitted)

[0.052]*** [0.012]*** [0.003]*** [0.018]*** [0.005]***

Great Depression -149.953 -149.33 -18.567 -18.582 -3.877 -3.851 -36.98 -36.867 -4.554 -4.449

[51.222]*** [28.936]*** [11.957] [7.721]** [3.073] [1.642]** [17.732]** [12.496]*** [5.466] [4.396]

(Soil suitability)x(Great Depression) -55.175 -58.563 5.829 5.907 -3.922 -4.06 3.451 2.837 -8.826 -9.394

[61.473] [34.948]* [14.35] [9.325] [3.688] [1.983]** [21.28] [15.093] [6.56] [5.31]*

(Distance)x(Great Depression) 0.216 0.221 0.009 0.009 0.004 0.004 0.057 0.058 0.012 0.013

[0.071]*** [0.04]*** [0.017] [0.012] [0.004] [0.002]* [0.024]** [0.017]*** [0.008] [0.006]**

Rainfall 6.841 17.159 2.533 2.294 0.479 0.9 0.598 2.468 -0.897 0.833

[20.129] [16.722] [4.699] [4.617] [1.208] [0.986] [6.968] [7.221] [2.148] [2.541]

Province dummies NO YES NO YES NO YES NO YES NO YES

Observations 56 56 56 56 56 56 56 56 56 56

Number of groups 28 28 28 28 28

Adjusted R-squared 0.71 0.908 0.547 0.788 0.54 0.869 0.439 0.721 0.592 0.736

Note: Standard errors are in parentheses. *, **, *** Significant at the 10%, 5% and 1% levels, respectively. DID, difference-in-differences. FE, fixed effects.

Rainfall denotes to log(rainfall).

54

Table A8: Robustness Check -- Average province-level real household debts (in 1933/1934 prices)

Expenditure Debts Debt-to-income ratio

OLS FE OLS FE

[1] [2] [3] [4]

Soil suitability for rice cultivation 73.286 (omitted) 0.209 (omitted)

[31.642]** [0.315]

Distance from Bangkok -0.219 (omitted) -0.0006 (omitted)

[0.035]*** [0.0003]*

Great Depression 54.31 69.715 0.711 0.879

[36.164] [17.761]*** [0.353]** [0.327]***

(Soil suitability)x(Great Depression) -21.51 -41.382 0.057 -0.187

[43.351] [21.349]* [0.427] [0.4]

(Distance)x(Great Depression) -0.08 -0.083 -0.001 -0.001

[0.048]* [0.023]*** [0.0005]** [0.0004]***

Rainfall -13.389 0.552 -0.179 -0.038

[13.334] [9.181] [0.132] [0.172]

Province dummies NO YES NO YES

Observations 108 108 54 54

Number of groups 28 28

Adjusted R-squared 0.627 0.915 0.488 0.602

Note: Standard errors are in parentheses. **, *** Significant at the 5% and 1% levels, respectively.

DID, difference-in-differences. FE, fixed effects. Rainfall denotes to log(rainfall).