Đang tải... (xem toàn văn)
PATTERNS OF HOUSEHOLD CONSUMPTION IN VIETNAM
Website: http://www.docs.vn Email : lienhe@docs.vn Tel (: 0918.775.368 NATIONAL ECONOMIC UNIVERSITY INSTITUTE OF SOCIAL STUDY HA NOI THE HAGUE VIETNAM – NETHERLANDS PROJECT FOR MASTER DEGREE ON ECONOMICS OF DEVELOPMENT PATTERNS OF HOUSEHOLD CONSUMPTION IN VIETNAM A thesis presented by Cao Thi Thuy Hang Supervisor Dr NGO HUY DUC IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR OBTAINING THE DEGREE OF MASTER OF ARTS IN ECONOMICS OF DEVELOPMENT Hanoi, 2006 ACKNOWLEDGEMENTS First of all, I would like to thanks the Vietnam-Netherlands project for providing me the opportunity to participate in this course, in which I have received many benefits in terms of knowledge, approach and methodology of doing research I wish to express my since thanks to my supervisor, Dr Ngo Huy Duc for his patient attention, guidance and precious advice His assistance helped me overcome difficulties and encourage me during the period of writing this thesis I am indebted to Dr Adam Mc.Carty and Prof., Dr.Sc Vu Thieu for their efforts in running the Project and their strict disciplines toward writing a thesis Their advice would still accompany with my life and my career in the future My thanks are also sent to all my teachers in the Vietnam-Netherlands Project for Master Program in Economics of Development for their enthusiastic supports I also wish to express my appreciation for the assistance of the project staffs; all my friends and classmates who helped me fulfill this thesis Finally, I would like to thank my family for their understanding and support during the thesis preparation process ii TABLE OF CONTENTS CHAPTER 1: INTRODUCTION 1.1 The relevance of the thesis .1 1.2 Focus and scope of the thesis 1.3 Methodology 1.4 Data sources 1.5 Structure of the thesis CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Concepts and definitions .5 2.1.1 Household 2.1.2 Consumption 2.2 Consumption theories 2.2.1 Keynes’ consumption function 2.2.2 Fisher’s intertemporal choice model 2.2.3 Modigliani’s life-cycle hypothesis 10 2.2.4 Friedman’s permanent-income hypothesis 13 2.2.5 Hall’s random-walk hypothesis .15 2.3 Empirical study review 16 2.4 Chapter remarks 18 CHAPTER 3: AN OVERVIEW OF HOUSEHOLD CONSUMPTION IN VIETNAM 20 3.1 Characteristics of household in Vietnam 20iii 3.2 Household consumption in Vietnam in 2002 21 3.2.1 Household consumption by household income 21 3.2.2 Household consumption by region and quintiles .22 3.2.3 Household consumption between urban and rural area 24 3.2.4 Household consumption by household size and number of children .25 3.2.5 Household consumption by household head’s education 26 3.2.6 Household consumption and head’s age and gender 27 3.2.7 Household consumption by occupation of household head 29 3.3 Chapter remarks .29 CHAPTER 4: MODEL SPECIFICATION AND EMPIRICAL RESULTS 31 4.1 Model specification 31 4.1.1 Econometric formulation 31 4.1.2 Variables 32 4.1.2.1 Dependent variable 32 4.1.2.2 Explanatory variables 32 4.2 Data and estimation procedure 36 4.2.1 Data description .36 4.2.2 Estimation procedure .39 iv 4.3 Estimation results 39 4.4 Chapter remarks 44 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 45 5.1 Conclusions 45 5.2 Recommendations 46 5.3 Limitations and suggestion for further studies 47 Bibliography 48 Appendix 51 v LIST OF TABLES Table 3.1: Household consumption and HH income by quintiles (’000 VND/year) 22 Table 3.2: Household consumption by regions and quintiles (’000 VND/year) .23 Table 3.3: Household consumption by rural/urban and consumption quintiles (’000 VND/year) 24 Table 3.4: Household head’s number of schooling year by consumption quintiles 27 Table 3.5: Age of household head by consumption quintiles 27 Table 3.6: Household consumption by head’s gender and consumption quintiles (’000 VND/year) 28 Table 3.7: Household consumption by occupation of household head and consumption quintiles (’000 VND/year) 29 Table 4.1: Variables description .38 Table 4.2: Estimation of household consumption in Vietnam in 2002 40 LIST OF FIGURES Figure 1.1: Keynes’ consumption function vi Figure 1.2: The consumer’s budget constraint 10 Figure 1.3: The life-cycle hypothesis of consumption 11 Figure 1.4: The Life-cycle consumption functions 12 Figure 1.5: Household consumption and permanent income .15 LIST OF APPENDIXES Appendix 3.1: Household consumption by number of schooling year 51 vii Appendix 3.2: Household consumption by household size 52 Appendix 3.3: Household consumption by number of children 53 Appendix 4.1: Regions classification in the data set 54 Appendix 4.2: Urban and rural classification .55 Appendix 4.3: Variable definition .56 Appendix 4.4: Estimation of full model 57 Appendix 4.5: Estimation of reduced model .58 Appendix 4.6: Analysis of correlation among variable .59 Appendix 4.7: Test normality of residual .60 Appendix 4.8: Other usual tests 61 ABBREVIATIONS ADB Asian Development Bank viii APC Average propensity to consume CPI Consumer Price Index GDP Gross Domestic Product GNP Gross National Product GSO General Statistic Office LCH Life-cycle hypothesis MPC Marginal propensity to consume MSE Residual Mean Square OLS Ordinary Least Square PIH Permanent income hypothesis P-|t| Associated p-value SOE State-owned enterprise Std.Dev Standard Deviation UNDP United Nations Development Program VHLSS Vietnam Household Living Standard Survey VLSS Vietnam Living Standard Survey VND Vietnamese Dong WB World Bank ix CHAPTER INTRODUCTION “Consumption is the sole end and purpose of all production” - Adam Smith - 1.1 THE RELEVANCE OF THE THESIS In any society, one of the ultimate objectives of the economic system is to deliver goods and services to its members The success of an economy can be measured by its ability to provide for its people, to feed them, to clothe and shelter them, and to offer them access to good health, to education and to a wide range of consumer goods (Deaton and Case, 1987) Based on such things, to evaluate the prosperity and social welfare of an economy, consumption is the most appropriate measurement At macro level, consumption, or more precisely aggregate consumption, is a major component of aggregate demand or so-called gross national product (GNP) It runs about 65 percent of GNP in the United States (Branson, 1989) and even higher in many developing counties, accounted for about three fourth of annual GNP (Deaton, 1997) Because of its significance, consumption becomes direct or indirect target of many economic polices such as demand stimulating policy, other fiscal policies and national programs With respect to consumer behavior at micro level, household consumption is also of interest Patterns of consumption within the budget constrain are important in examining the structure of household activity, while the amounts consumed of various goods, particularly foodstuffs, are usually used in determining nutritional status, health and life-expectancy, which in turn results in the quality and quantity of human resource in the economy Considered to be one of the most successful economies in transition, Vietnam has experienced high growth rate of about percent annually (GSO, 1998) Consequently, a large number of poor household have been escaped from poverty and living standard has much improved A decade ago, 58 percent of the population had an expenditure level that was insufficient to support a healthy life but this figure had fallen to 29 percent by 2002 (Rama, 2004) ... OVERVIEW OF HOUSEHOLD CONSUMPTION IN VIETNAM 20 3.1 Characteristics of household in Vietnam 20iii 3.2 Household consumption in Vietnam in 2002 21 3.2.1 Household consumption by household. .. analysis of household consumption including highlighting major features of household consumption, rationing and formulating econometric model, describing data, presenting and interpreting empirical... approaches explaining consumption behavior of household Then, it goes over key findings of some relevant empirical studies on the aspect An overview of household consumption in Vietnam relying on data