# The Effect of Rainfall on Economic Growth in Thailand: A Blessing for Poor Provinces
## 1 Introduction
In terms of economic activity, [PERSON] and [PERSON] (2010), who considered the losses in industrial output by examining a global sample of trade data, found that for each 1\({}^{\circ}\)C of warming, poor countries faced an average 2.4% decline in exports. However, there has not yet been a robust clarification of the effect of average precipitation. The purpose of this study was to investigate how rainfall affected Thai economic growth. Our first objective involved estimating the impact of rainfall on the aggregate GDP growth at the provincial level, whereas the second objective was to conduct a detailed examination of individual economic sectors such as, agriculture, industry, and services. We decided to investigate these three sectors since there was no reason to assume that annual rainfall would affect them in a similar manner. Moreover, additional evidence was provided to show that rainfall affected these sectors and their subsectors. To the best of our knowledge, this research has never been undertaken in Thailand. Weather estimates have long been used in statistical models as explanatory variables ([PERSON] et al., 2013). Weather works similar to a \"natural experiment\" since it has external causes and can have seemingly random effects on economic activities, while we are able to recognise the statistical causal effect of one weather variable on economic results ([PERSON] and [PERSON], 2001). In the present study, rainfall was taken as a variable of interest while temperature was used as the control variable. The fundamental assumption was based on the premise that economies could be influenced by rainfall. This was consistent with [PERSON] et al. (2013) who suggested that precipitation extremes had been the key climate determinant of historical GDP growth. An economic growth model was developed subsequently to incorporate rainfall as a climatic variable in the production function ([PERSON], 2012; [PERSON] et al., 2013; [PERSON] and [PERSON], 2019). Hence, in the case of Thailand, the feasible generalised least squares (FGLS) estimator was used to analyse panel data across the country's 76 provinces from 1995 to 2015. Three major conclusions were drawn from the study. First, at the national level, rainfall had a significantly negative impact on the growth of the gross provincial product (GPP) while temperature had a positive but not significant impact. This result implied that rainfall was the key climatic variable. In addition, rainfall was crucial for Thailand's poorer regions. Second, the agricultural sector was the most vulnerable sector to rainfall while the service sector was the second most vulnerable. However, the industrial sector was positively but not significantly affected by rainfall. Finally, at the subsector level, the results showed that rainfall was beneficial to mining, hotels and restaurants while the agricultural, public administration, defence, and health subsectors were negatively affected by rainfall. Overall, the results displayed that rainfall had a largely negative affect on Thai economic activities, thus implying that the Thai economy was sensitive to rainfall. These results contributed to the existing literature by clarifying how precipitation affects aggregate economic growth and in certain economic sectors. Furthermore, the findings provided important insights into which economic subsectors should be supported by the government, especially during predictable rainy seasons, as well as determining which areas should receive improved water management, particularly poor regions. Finally, the findings may motivate similar research in other developing countries in the region, and provide a host of new results about how precipitation and other weather aspects affect the economy. The present paper is structured as follows: The first section begins with the introduction. The next section reviews the existing literature concerning how precipitation could affect economic growth.