World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 104

World Food Policy - Volume 2 Issue 2/Volume 3 Issue 1, Fall 2015/Spring 2016

Income Diversity and Poverty Transitions: Evidence
from Vietnam
Van Q. TranA
The large share of the population in rural areas of the developing world has
been diversifying their livelihood to nonagricultural activities. However, the
amount of the literature that discusses the possible effects of the diversity on
a household’s well-being is still limited. This study contributes to this strand
of the literature by investigating the effects of income diversity on poverty
transitions. The analysis is based on household panel data collected in the
2000s from Vietnam and applied to a multinomial logit model. The results
show that households with better access to markets are more able to diversify
their income sources to nonagricultural activities and the diversity is helpful for
a household to escape poverty or to avoid falling into poverty.
Keywords: income diversity, poverty transitions, nonagricultural income
sources, Vietnam
JEL classification: I32, O13, P36, R11

Introduction

approaches and country cases. They
have identified the characteristics of a
he dynamics of poverty have household, the private and public assets
been one of the central issues in a household possesses, the changes in
development economics. There macroeconomic condition such as trade
has been a great deal of theoretical studies reform, inflation, and economic crisis on
(Cappellari and Jenkins 2004; Carter the dynamics of poverty.
In fact, the majority of the
and Barret 2006) and empirical studies
(McCulloch and Baulch 1999; Glewwe, poor lives in rural areas and engages
Gragnolati, and Zaman 2000; Woolard in agricultural activities. Also, the
and Klasen 2005; Justino, Litchfield, and large share of the rural population is
Pham 2008) that discuss the transitions diversifying their income sources to
into and out of poverty using different nonagricultural activities that are usually

T

A

University of Economics and Law, Vietnam National University
doi: 10.18278/wfp.2.2.3.1.7
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