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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.

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