Inequality in Vietnamese Urban-Rural Living Standards, 1993-2006
AbstractUsing data from five waves of the Vietnam Household Living Standard Survey, we find evidence of significant urban-rural expenditure inequality. Urban-rural inequality increased dramatically from 1993 to 1998, and peaked in 2002 before reducing slightly in 2004, and significantly in 2006. The urban-rural gap also monotonically increases across the expenditure distribution. We use a variant of the Oaxaca-Blinder decomposition method, applied to the unconditional quantile regression method of Firpo, Fortin and Lemieux (2009), to explain the components of the per capita expenditure differentials between urban and rural households at selected quantiles of the distribution. We also compare these estimates with those at mean obtained by OLS. Our results show a number of factors contributing significantly to the high urban-rural gap. These include inter-group differences in education, household demographic structure, industrial structure and their related returns. Adjusting the average characteristics of rural households to those of urban households will reduce about a half of the overall urban-rural expenditure gap. A significant part of the remaining unexplained component lies in the intercept differences; that is, the inter-group differences in other factors not captured in the model that favor urban households.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7918.
Date of creation: Jul 2010
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Other versions of this item:
- Le, Huong Thu & Booth, Alison L., 2010. "Inequality in Vietnamese Urban-Rural Living Standards, 1993-2006," IZA Discussion Papers 4987, Institute for the Study of Labor (IZA).
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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