RMIT Vietnam NewsKey indicators of rural family wealth

Key indicators of rural family wealth

Friday, October 31, 2014 - 16:24
In Thanh Hoa and Huaphanh, differences in wealth were indicated by the ownership of a few basic household appliances such as fans, refrigerators etc.
A rural family home in the survey.

RMIT Vietnam researchers have developed a new analysis technique for identifying the basic indicators of the wealth of farming families in South East Asia.

The research will be submitted for publication in The Review of Income and Wealth and will be of interest to government ministries and aid agencies such as the World Bank.

Assistant Professor Giovanni Merola and Associate Professor Bob Baulch, both from RMIT Vietnam's Centre of Commerce and Management, found that consumer durables were the key wealth indicators for rural families.

The findings were drawn from two household surveys conducted in Lao PDR and Vietnam.

"The surveys were of 530 households in Thanh Hoa in North-West Vietnam and Huaphanh in North East Laos," Assistant Professor Merola said.

"Differences in wealth were not indicated by people owning productive assets such as farming equipment and tools but by the ownership of a few basic household appliances such as fans, refrigerators and to a lesser extent, satellite dishes.

"Also, the type of floor in the family home turned out to be a key indicator of a household's wealth.

"These things tell us a lot about the living standard of families in these poor rural areas."

Associate Professor Baulch said it's difficult to measure the wealth of families in these areas through more conventional measures.

"People in Huaphanh don't always use money for transactions, and expensive items such as refrigerators and satellite dishes are rare," he said.

"The number of electric fans owned by households is a good indicator of their prosperity.

"We were interested in comparing Vietnamese and Laotian living standards in such poor and remote rural areas, and applying this new analysis technique to the data from the two household surveys."

Assistant Professor Merola said this type of analysis is useful because it doesn't require long questionnaires and uses specific assets to study people's standard of living.

"We think this analysis technique is more efficient than others for analysing this kind of data," he added.

The data included information on the materials used to build family homes, including the type of roof and floor, and the number of other household possessions, including bicycles, motorbikes, cookers, water heaters, televisions and satellite dishes.

Farming equipment and tools were also included in the surveys.

The results confirmed that Vietnamese families in rural North East Vietnam were a little more prosperous than neighbouring districts in rural North West Laos.

The researchers presented their research at the 7th Vietnam Economics Association Meeting (VEAM) in Ho Chi Minh City in June and at the Advances in Business-Related Scientific Research Conference (ABSRC) in Rome in September this year.

"We had some good feedback and hope our new analysis technique will be applied in other areas and countries after publication," Assistant Professor Merola said.