This study aims to provide nationwide empirical evidence on the impact of the One Tambon One Product (OTOP) rural entrepreneurship program on average household income by analyzing basic village-level information data in Thailand.
A two-way fixed difference-in-differences model, along with Mahalanobis distance matching, was estimated using data covering the period from 2017 to 2021, containing 4,215 treatment villages newly registered with the OTOP program in 2019. Control villages were selected from the 28,736 villages that were not registered in the OTOP program.
The estimation results indicate that the OTOP program significantly improved the average household income by 2,864.85 THB annually. They also revealed that the positive impact of the OTOP program on household income increased in villages with relatively lower incomes, without seasonal farming, with tourist spots, and with social networks outside the village. They also found that the OTOP program enhanced household income regardless of the percentage of the older population and the ratio of households participating in community groups.
This study reconfirms the validity of the OTOP program as a poverty alleviation policy, verifies its synergistic effects with tourism and highlights the effectiveness of promoting digital technologies into the program.
To the best of the authors’ knowledge, this is the first nationwide study to empirically demonstrate the effectiveness of the OTOP program in enhancing household income. Moreover, this study uses a quasi-experimental design to estimate its strict causal effects.
