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Does Urbanization Help Poverty Reduction in Rural Areas?Evidence from a Developing Country

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  • Nguyen, Cuong

Abstract

Urbanization and poverty have a two-way relationship. Using fixed-effects regression and panel data from household surveys, we estimate the effect of urbanization on income and consumption expenditure of rural households in Vietnam. Then we propose a simple estimate method to estimate the effect of urbanization on rural poverty. It is found that a one percent increase in urbanization leads to a 0.54 percent increase in per capita income and a 0.39 percent increase in per capita expenditure of rural households. In addition, a one percentage point increase in urbanization helps rural households decrease the poverty rate by 0.17 percentage point. However, we find an effect of urbanization on consumption of unhealthy goods: urbanization increases household expenditures on tobacco and wine.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48660.

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Date of creation: 20 Jun 2012
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Handle: RePEc:pra:mprapa:48660

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Keywords: Urbanization; household welfare; poverty; impact evaluation; household surveys; Vietnam; Asia.;

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Cited by:
  1. Nguyen, Cuong & Nguyen, Hoa, 2013. "Do Internal and International Remittances Matter to Health, Education and Labor of Children? The Case of Vietnam," MPRA Paper 48672, University Library of Munich, Germany.
  2. Frederic Teulon, 2014. "Albert Hirschman (1915-2012) : l’étude des aspects non économiques de l’économie," Working Papers, Department of Research, Ipag Business School 2014-478, Department of Research, Ipag Business School.
  3. Matthew A. Cole & Robert J.R. Elliott & Eric Strobl, 2014. "Climate Change, Hydro-dependency and the African Dam Boom," Working Papers, Department of Research, Ipag Business School 2014-454, Department of Research, Ipag Business School.

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