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Exploring Differences in Rural Household Debt between Thailand and Vietnam: Economic Environment versus Household Characteristics

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  • Waibel, H.
  • Chichaibelu, B.B.

Abstract

This study aims to explore cross-country differences in credit market participation, level of household debt holding and over-indebtedness between rural households in Thailand and Vietnam. Using a unique rural household survey data from Vulnerability in Southeast Asia project, it first identifies socio-economic determinants of such market outcomes for rural households in Thailand and Vietnam. It decomposes differences into a part that arise due to configuration of household characteristics or a part that arise due to differences in economic environments using three decomposition methods. Significant differences are observed in credit market participation rates and level of debt holding and indebtedness between rural households in Thailand and Vietnam. Rural households in Thailand tend to participate more in the credit market and face higher risk of over-indebtedness. These observed differences arise mainly due to dissimilarity in the economic environment for households with similar characteristics. Economically disadvantaged rural households in Thailand are more likely to participate in the credit market and face higher level of indebtedness mainly because credit markets are make borrowing easy. The higher gap observed in the upper part of the debt distribution between Thailand and Vietnam can be explained by differences in credit market conditions between the two countries. Acknowledgement :

Suggested Citation

  • Waibel, H. & Chichaibelu, B.B., 2018. "Exploring Differences in Rural Household Debt between Thailand and Vietnam: Economic Environment versus Household Characteristics," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277520, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277520
    DOI: 10.22004/ag.econ.277520
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