Does Urbanization Help Poverty Reduction in Rural Areas?Evidence from a Developing Country

Nguyen, Cuong (2012): Does Urbanization Help Poverty Reduction in Rural Areas?Evidence from a Developing Country.

Abstract

Urbanization and poverty have a two-way relationship. Using fixed-effects regression and panel data from household surveys, we estimate the effect of urbanization on income and consumption expenditure of rural households in Vietnam. Then we propose a simple estimate method to estimate the effect of urbanization on rural poverty. It is found that a one percent increase in urbanization leads to a 0.54 percent increase in per capita income and a 0.39 percent increase in per capita expenditure of rural households. In addition, a one percentage point increase in urbanization helps rural households decrease the poverty rate by 0.17 percentage point. However, we find an effect of urbanization on consumption of unhealthy goods: urbanization increases household expenditures on tobacco and wine.

• Item Type: MPRA Paper
• Language: English
• Keywords: Urbanization, household welfare, poverty, impact evaluation, household surveys, Vietnam, Asia.
• Subjects: I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I30 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis ; Housing ; Infrastructure; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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