Nguyen, Linh Thuy2021-09-062021-09-062021https://hdl.handle.net/10182/14179Since the country’s reform in 1986, Vietnam has experienced economic growth and achieved significant development goals, particularly in living standard improvement, poverty reduction and income distribution. However, Vietnam faces a high, persistent poverty incidence among the rural areas and ethnic minority groups, an increasing gap between rich and poor and wide inequality income distribution between the rural than the urban sector. Despite many studies on poverty and inequality in Vietnam, there is a lack of evidence on the factors that determine both the probability of living in poverty and poverty intensity. This study investigates the determinants of poverty and poverty intensity and the sources of inequality in Vietnam particularly in rural areas and ethnic minority communes since the country became a middle-income country in 2009. Household and commune-level data are obtained by combining the 2012, 2014 and 2016 Vietnam Household Living Standards Surveys. The empirical models include multiple linear regression, binary and fractional logistic regression to examine the determinants of real per capita expenditure, the likelihood of falling into poverty, and the poverty intensity for the Total Households (TH), the Total Rural Households (TRH), and the Rural Ethnic Minorities (REM) during the study period (2012-2016). In addition, we use the Generalised Entropy (GE) index decomposition method to examine the main drivers of income inequality among all households in Vietnam, particularly in the rural and ethnic minority communes. At the household level, our findings show that the household head, the household and regional characteristics significantly affect the household groups’ real per capita expenditure and the likelihood and intensity of poverty. In particular, residential location (rural and urban areas, six regions in Vietnam), ethnicity, education level, employment, household size, housing conditions and development programmes are strong determinants of welfare, poverty and the intensity of poverty of the three household groups. At the commune level, we found that general commune characteristics, infrastructure, land and non-agricultural employment opportunities significantly affected TRH’s and REM's expenditure and the probability and intensity of poverty. Previous studies that use only logit models neglected several influences on poverty intensity; this study overcomes the issue. For example, language barriers, farm size and overseas remittances did not affect REM’s likelihood of poverty but significantly influenced REM’s poverty intensity. Limited access to the district hospital or a post-office widened REM’s poverty gap; it had no statistically significant impact on the likelihood of poverty in the REM communes. We found decreasing income inequality for all Vietnamese households during the study period (2012-2016). For the decomposition of income inequality, the decreasing income inequality for both rural/urban areas and the ethnic majority was the main driver of the country’s narrowing income inequality. However, we found ethnic minorities’ increasing income inequality negatively affected the country’s total income equality. In addition, the income inequality levels within groups and between the top 10% and the bottom 10% were the main drivers of income inequality in rural areas and ethnic minority communes.enhttps://researcharchive.lincoln.ac.nz/pages/rightspovertyincome inequalityeconomic well-beingVietnampoverty intensityper capita expenditurehousehold incomerural householdsethnic minoritiescommunesThesisANZSRC::380119 Welfare economicsANZSRC::440405 Poverty, inclusivity and wellbeingANZSRC::380118 Urban and regional economicsQ112956239