The Dynamic Adjustment of Structure and Demand for Labour in Thai Agriculture

Abstract

The main purpose of this study is to develop an appropriate analytical model for understanding the relationships between agricultural inputs and outputs and the nature of dynamic adjustment of labour demand in Thai agriculture. It involved investigating the structural characteristics of demand for labour, output supply and other input demands, and the nature of the impact of technical change on labour demand, other input demands and output supply. ... This study concluded that the dynamic model was superior to the static model in that it provided more valuable information on the speed and independence of adjustment of quasi-fixed labour inputs, short-run and long-run price elasticities and short-run and long-run biases in technical change in Thai agriculture. Moreover, the differences in the estimates obtained from the two approaches suggest that misleading information may be obtained when one attempts to model a dynamic process with a static tool.