Determinants of investment in rural households in Vietnam

Thi Thanh Nhan Tran

    Research output: ThesisMaster's Thesis

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    This study investigates the determinants of rural household investment in Vietnam. Private investment plays a key role in economic development in developing countries in general and in Vietnam in particular. In the study, three components of household investment (in education, farm assets, and non-farm assets) are analyzed. In addition, housing investment is considered as a special type of non-farm asset investment and is estimated in a separated model. The Tobit model is applied using data from the Vietnam Household Living Standard Surveys which was conducted by the General Statistic Office (GSO) in 2004, 2006 and 2008. In analyzing the determinants of household investment, the study focuses on household income, credit access, and land use right as well as other socioeconomic, year and regional dummy variables. The results show that income has a positive effect on all household investments. Regarding credit access, only informal credit sources (from individuals or relatives) are significant in non-farm and housing investment while all credit sources positively affect expenditure on farm assets. Surprisingly, land use right has no significant effect on any of the categories of household investments. The study indicates that there is a close link between the investment and demographic characteristics of households. Also, differences in household investment by regions and time are found in this study.
    Original languageEnglish
    Publication statusUnpublished - 2011


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