Journal
ECONOMIC ANALYSIS AND POLICY
Volume 68, Issue -, Pages 348-362Publisher
ELSEVIER
DOI: 10.1016/j.eap.2020.10.005
Keywords
Crop livelihood; Fixed effects; Pro-poor; Income; Unconditional quantile regression
Categories
Funding
- Vietnam National Foundation for Science and Technology Development (NAFOSTED) [502.01-2020.07]
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Using a household panel dataset for the 2008-2016 period, we analyze the heterogeneous effects of livelihood change on household well-being in rural Vietnam. We use an unconditional quantile regression (UQR) model with fixed effects to control for unobservable time-invariant household characteristics. We find that when a fixed-effects estimator is employed, households switching from a crop livelihood to any noncrop livelihood (e.g., livestock, wage-earning, nonfarm, private or transfer livelihoods) increase their per capita income and food consumption. However, the results from the UQR with fixed effects reveal a significant variation in the effect of such a switch in livelihood across various quantiles of well-being distribution, with a larger effect for poorer households. The income effect, however, tends to decline with higher quantiles and even turns negative with a switch to a wage-earning or public transfer livelihood for the better off. Notably, our study confirms the pro-poor impact of changing livelihood from crop to non-crop activities in rural Vietnam. Our research results also suggest that a mean regression approach that often assumes a homogeneous/mean effect of livelihoods on well-being, may miss some heterogeneity that is useful to researchers and policy makers. (C) 2020 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.
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