Journal of Asian Business and Economic Studies
Vol. 31(4) , October 2024, Page 290–306


Consumption inequality between farm and non-farm households in rural Vietnam
Pham Le Thong & Nghiem Tan Le & Nhi Nhat Phuong Ho & Thanh Cong Le

DOI: https://doi.org/10.1108/JABES-09-2022-0224
Abstract
Purpose This study aims to analyse the consumption inequality between farm and non-farm households in rural Vietnam, using the data from the 2016 Vietnam household living standards survey. Design/methodology/approach The present paper applies the “recentered influence functions (RIF)” in “Oaxaca-Blinder (OB)” type decomposition as proposed by Firpo et al. (2018) to allow for the flexible distribution of the outcome variables and the non-randomness of non-farm employment that violates the classical linearity assumption. Findings Non-farm households have significantly higher per capita consumption expenditure than farm households for the entire distribution. The gap in expenditure is large at low percentiles and narrowing with higher percentiles. At 10th percentile, the gap is estimated at 27.1%, but it is decreasing to 11.1% at 90th percentile. Most of the gaps are explained by the differences in the observed characteristics between farm and non-farm households such as ethnicity, education, income, internal transmittances and household composition. Non-farm households are endowed with more productive factors that result in higher per capita consumption expenditure. Originality/value Gaps in ethnicity and education are found to be key predictors of the inequality in consumption expenditures between farm and non-farm households, then, government policies that are aimed at increasing access to non-farm employment and education for ethnic minorities and for rural poor households are pathways to improve rural household welfare and hence reduce inequality.

Keywords
Consumption inequality, Non-farm household, Oaxaca-blinder decomposition, Rural Vietnam
Partner's generalized locus of control and domains of job satisfaction: evidence from Australia
2025, Journal of Asian Business and Economic Studies More

Understanding academic’s job stress through a moderated–mediation model of perceived supports and working hard
2025, Journal of Asian Business and Economic Studies More

Vietnamese and American student commitment: the impact of exercise self-efficacy and collectivism
2025, Journal of Asian Business and Economic Studies More

Applying quantile regression to determine the effects of household characteristics on household saving rates in Vietnam
2020, Journal of Asian Business and Economic Studies More

Herding behaviour of Chinese A- and B-share markets
2020, Journal of Asian Business and Economic Studies More